US mid-term election results influence price drops at the NBP

Gas prices reduced at the NBP on Friday as the Summer 27 front-season contract settled at circa 157.9p/therm (5.4p/kWh), a modest 1.8% daily pullback and a substantial 14.4% net weekly loss.

Sentiment last week was heavily influenced by the US midterm elections, which handed control of Congress to the Democratic Party.

Vice President JD Vance said the Iran war was a primary reason for the Republican defeat, and a Democratic-led Congress, once seated in January, will have greater scope to shape funding for military operations.

This has likely helped to trim risk premium from energy prices, as markets may view greater congressional oversight as lowering the chance of a prolonged or escalating conflict, though the President retains significant influence over military policy.

Baseload power followed gas lower into the weekly close on Friday, with the Summer 27 contract settling at circa £123/MWh, down £1.26/MWh (1.0%) on the day and £14.4/MWh (10.5%) on the week, according to ICE data.

Losses were steeper at the front of the curve, where December 26 shed £7.34/MWh.

The decline came despite a markedly tighter generation mix, with wind collapsing from 28.1% of the stack to 9.4% and gas-fired generation climbing from 42.7% to 58.8%.

The latest run of the Crown Gas and Power 14-day model points to a sharp cold snap later this week, before milder, windier conditions return from the weekend.

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Price commentary courtesy of Crown Gas and Power