Geopolitical tensions and supply concerns drags prices in both directions

Natural gas prices were once again dragged in both directions at the NBP on Wednesday, as the market eyed mixed supply, demand and geopolitical signals ahead of the winter supply season.

Speeches by US and Iranian leaders at the UN General Assembly earlier this week have done little to ease tensions or signal an imminent end to the 7-month conflict, which has significantly impacted global energy flows.

Meanwhile, exports from Norway, Europe’s largest supplier, remained constrained by planned and unplanned maintenance just as Europe races to reinforce its storage reserves.

Data from offshore operator Gassco shows that 130.3mcm is expected to be offline on Thursday, including an ongoing restriction at the major Troll field following a compressor failure last Friday. This event alone will remove 46.2mcm today, with a resolution not expected until Sunday morning.

Baseload power prices tracked gas lower on Wednesday, with both markets posting losses as some of the recent risk premium eased.

The softer tone was reinforced by the generation mix, as a return of stronger winds broke the low-wind spell that had built up since Friday.

Wind output more than doubled from 13.8% to 33.7% of the stack, while gas-fired generation fell back sharply from 46.3% to 28.3%.

That lifted combined renewables back above half of the mix at 54.6% and eased the gas-for-power demand that had supported gas and power prompt prices earlier in the week.

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Price commentary courtesy of Crown Gas and Power