Market continues to soften amid robust supply and cooling tensions in the Middle East

The market continued to soften on Friday amid robust supply and cooling tensions in the Middle East.

Reductions were posted across the majority of seasonal contracts over the course of the week as unplanned works across UK and Norwegian fields were kept to a minimum.

This allowed for steady, uninterrupted pipeline supplies into Great Britain.

High levels of LNG sendout are also expected over the next few weeks, the Orion Sirius arrived at the Milford Haven terminal on Saturday, offloading a cargo from the Corpus Christi facility in Texas, with a further 3 vessels due to arrive by the end of October.

Baseload power prices extended their decline for a third consecutive session on Friday, supported by steady electricity imports from mainland Europe that helped offset a sharp drop in wind generation.

Looking ahead to week 42, wind is forecast to remain limited in the early part of the week, sustaining reliance on gas-fired (CCGT) generation.

However, a recovery in renewable output is expected later in the week, and in the meantime, the gas market’s current weakness continues to provide a buffer against volatility in the power mix.

If you want to see more information on the wholesale market trends subscribe to our weekly report here.

Price commentary courtesy of Crown Gas and Power