Market lacks clear direction amid continued geopolitical issues mixed with strong renewable output

Curve contracts continued to trade in a rangebound fashion on Tuesday, this time opting to swing lower, erasing much of Monday’s gains and returning the Winter 26 front-season back to Friday’s levels.

The market has lacked clear direction so far this week, with participants weighing unseasonably low demand against below average storage levels and high levels of maintenance in Norway.

According to the latest 14-day model run, demand is expected to trend slightly below seasonal norms until 26th September before lifting slightly above average, though this temporary dip could help to support storage injections over the next 10 days.

The Middle East conflict continues to serve as an underlying source of support, limiting downside potential on softer days like yesterday.

An exceptionally strong day for renewables weighed heavily on the near-curve on Tuesday, with a sharp reversal on the NBP filtering bearish sentiment into baseload power contracts further out.

Elexon data shows renewable sources (wind, solar, biomass, hydro) accounted for nearly two-thirds (63.6%) of the GB power mix, squeezing gas-fired generation down to an average of just 4.7 GW (14.4%) over the same period.

This morning, both markets are trading broadly flat when compared to yesterday’s close, with the Winter 26 contract hovering just north of the key 200p/therm psychological level.

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