Prices remain elevated as we await results US mid-term elections next week

The NBP continued to exhibit heightened volatility on Wednesday, a theme that has taken hold so far this week.

The Summer 27 front-season contract settled at 6.4p/therm (0.22p/kWh) higher, with much of the upward move originating at the front end of the curve. The supply and demand balance has not changed dramatically over the past couple of days.

Instead, large day-to-day swings in both directions may reflect shifting and mixed risk perceptions surrounding the upcoming US midterm elections and recent dialogue between Iran and regional states.

Unplanned works continue to soften Norwegian output; Åsgard and Oseberg will continue to see partial production curtailments until Friday and Monday, respectively.

Once again, we see a sharp reversal this morning, with Summer 27 being offered circa 4.5p/therm below its previous settlement at the time of writing.

Tracking gas higher, baseload power firmed on Wednesday as a low-wind spell began to take hold. Wind output fell from 52.7% of the stack to 36.6%, sliding to around 20% by the evening, while gas-fired generation rose from 16.9% to 29.6%, cutting renewables to 52.0%.

The lull looks set to be short-lived, with our forecast model showing wind recovering next week. However, temperatures are set to fall below seasonal norms from the weekend, keeping heating demand elevated.

In France, low Rhône levels threaten restrictions at Saint-Alban from Sunday, offsetting Cattenom 4’s return and limiting French export availability.

If you want to see more information on the wholesale market trends subscribe to our weekly report here.

Price commentary courtesy of Crown Gas and Power