Mixed moves at the NBP anchored by geopolitical volatility in the Middle East

NBP contracts closed mixed on Monday, with a softening of near-curve contracts contrasting with small gains posted for some of the further-out seasons.

Market sentiment remained anchored by geopolitical volatility in the Middle East, where Saudi Arabia’s active involvement in the Yemen civil war threatens transit through the Bab el-Mandeb Strait, a crucial maritime bottleneck for global LNG supply routes.

Simultaneously, the latest run of our 14-day model predicts above-average system demand from 15th October, reinforcing winter-supply concerns amid tighter European storage margins when compared to last year.

Strong and steady supply from Norway served as a price ceiling for the front-end, according to data from operator Gassco, Langeled pipeline flow nominations into Great Britain totalled 67.4mcm on Monday, accounting for around 45% of total British supply.

Holding close to Friday’s settlement, baseload power was largely unchanged on Monday as a stable generation mix offered little fresh direction.

Wind output held steady at 40.9% of the stack, compared with 41.0% on Friday, while gas-fired generation eased from 28.0% to 24.8%, nudging renewables up from 56.9% to 58.9%.

On the nuclear side, returns from refuelling at Hartlepool and Heysham 1 have been pushed back to the 9th and 13th October respectively, slightly delaying an expected improvement in baseload availability.

Overall, the system remains finely balanced heading into the second week of winter.

This Morning, both gas and power pricing has opened in bullish mode, with mixed reporting over control of Bab el-Mandeb feeding risk premiums.

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Price commentary courtesy of Crown Gas and Power