Volatile day of trading results in further increases at the NBP
It was a volatile day of trading at the NBP on Tuesday as an early sell-off proved short-lived, with key contracts such as the November 26 front-month rallying into the close to settle slightly higher.
Below-average demand was the primary bearish driver, with National Gas Transmission forecasting GB system demand at just over 151mcm as at 15:50, more than 69mcm below the seasonal norm.
Our 14-day model also suggests demand will remain below average until at least 10th November. That said, international conflicts and the upcoming US midterm elections continue to dominate market focus.
This Morning, the Summer 27 front-season is currently being offered circa 5p/therm (0.17p/kWh) higher, extending yesterday afternoon’s correction.
After a volatile session, baseload power ultimately settled lower on Tuesday as gas swung between a bearish short-term demand outlook and heightened geopolitical risks.
The generation mix was little changed; wind eased slightly from 54.6% of the stack to 52.7%, while gas-fired generation edged up from 15.1% to 16.9%, keeping renewables near two-thirds at 65.9%.
Mild mid-week temperatures are capping heating demand, though roughly 80% of Persian Gulf LNG flows remain locked away by attacks on Hormuz shipping.
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Price commentary courtesy of Crown Gas and Power 