Above average system demand foreasts drives prices up
Seasonal contracts continued to trade rangebound on Wednesday, while near-curve (monthly) contracts kept surging.
December 26 has netted about 20p/therm (0.68p/kWh) so far this week, against 8p/therm (0.27p/kWh) for Summer 27. A tight supply and demand outlook has offered firm support to the near-curve.
The Crown Gas and Power 14-day model points to system demand running well above seasonal norms from Friday through next week, before easing back towards normal in late November.
An uptick in LNG arrivals likely served as a price ceiling for the front end.
Shipping data shows 4 arrivals at UK terminals over the past 4 days, with 5 more vessels signalling for arrival over the next 7 days. If either of the 2 vessels due today arrives, November arrivals will narrowly outpace last year (8 vs 7).
Baseload power prices rallied across the curve on Wednesday, with December 26 climbing £8.15/MWh to £182.20/MWh and Summer 27 firming £3.90/MWh (3.3%) to circa £123.7/MWh, according to ICE data.
Wind extended its recovery for a second day, averaging 16.3% of the stack against 11.0% on Tuesday, while gas-fired generation slipped from 59.8% to 53.3%.
A late surge lifted wind to almost a third of generation by midnight, briefly pushing gas down to a similar share.
The reprieve looks short-lived, with the Crown Gas and Power 14-day model pointing to wind dropping back sharply on Friday as the cold snap peaks, and a more sustained recovery only in the final week of November.
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Price commentary courtesy of Crown Gas and Power 