Prices remain extremely volatile amid supply and demand issues and geopolitical uncertainty
Thursday’s trading reversed the previous session’s gains, with the front-season prices continuing to move in a wide range close to January 2023 levels.
US Vice President JD Vance has reportedly sent a letter via Qatari mediators to Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, which Iranian media confirm Tehran has received but not yet answered.
President Trump described the outreach as focused on medical supplies, while US media reports citing unnamed officials say it proposes direct talks that could avert new US strikes.
The letter has not been published, and it comes days before the US midterm elections on 3rd November.
Bearish momentum failed to take hold into Friday morning, with Summer 27 currently being offered just over 5p/therm (0.17p/kWh) above its previous settlement, as supply/demand and geopolitical risk premiums continue to steer the market unpredictably
Following gas lower, baseload power reversed Wednesday’s gains on Thursday, even as the low-wind spell deepened.
Wind output slumped from 36.6% of the stack to just 14.5%, while gas-fired generation climbed from 29.6% to 50.7%, more than half the mix, cutting renewables to 31.1%.
With shifting geopolitical risk steering gas, the tighter domestic fundamentals were largely overlooked.
Drax’s declaration that its 645 MW biomass Unit 2 will be unavailable through Q1 2027 adds to winter capacity concerns.
However, the Crown Gas and Power 14-day model shows wind recovering from early next week, even as temperatures fall below seasonal norms.
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Price commentary courtesy of Crown Gas and Power 