Increased demand drives up wholesale prices
NBP gas prices increased on Friday as Middle East tensions and rising demand continued to play into bullish sentiment.
Modest gains of circa 2p/therm (0.07p/kWh) were posted across the near-curve amid an ever shifting supply and demand outlook ahead of winter.
Supply risks stemming from ongoing conflict in the Middle East continued to serve as an underlying source of support. The wider energy complex also appeared to be spooked by recent events, with European oil and coal benchmarks registering weekly gains of 9.1% and 3.2% respectively (data from ICE).
Furthermore, the latest run of our 14-day model maintains that demand will surge well above seasonal norms from Wednesday, remaining predominately above average until at least 20th October, which could tighten the British system and slow storage injections over the same period.
This morning, gas prices have opened very much in line, with the Summer 25 front-season contract currently being offered not too far from its previous settlement, although many have yet to trade at time of writing.
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Price commentary courtesy of Crown Gas and Power 