Prices at the NBP reduce for third consecutive day with renewed hopes of US-Iran deal

Wednesday marked a third consecutive day of reductions at the NBP with renewed hopes of a US-Iran deal likely serving as the primary bearish driver.

The Democratic party won control of Congress in Tuesday’s midterm elections, a result President Trump has said he will accept, while Vice President Vance pointed to the war as the main reason for the defeat.

The conflict has yet to see any significant escalation so far, and reports suggest a draft Memorandum of Understanding between the two countries is under discussion, though neither government has formally acknowledged it.

From a short-term supply perspective; unplanned outages at Norway’s Åsgard, Oseberg and Visund fields continue to tighten regional flows, unwelcome news given that Gas Infrastructure Europe data shows the continent has switched to steady net withdrawals from storage facilities.

Following gas lower, baseload power posted further losses on Wednesday, with the generation mix offering little fresh direction.

Wind output edged up from 28.5% of the stack to 29.7%, while gas-fired generation held broadly steady at 40.4%, leaving renewables at 42.7%. Reports emerging from France of an EDF strike, which began on Wednesday evening and cut nuclear output by 2.4 GW as power unions joined nationwide protests, may have served as a price ceiling for the near-curve.

The Crown Gas and Power forecast model shows a lull in wind over the weekend and colder conditions into next week, tightening the system balance.

In the US midterm elections, Democrats are projected to have won control of both chambers of Congress, taking the House of Representatives and the Senate from the Republicans, according to major US media outlets.

Counting continues in several races, and the size of both majorities is not yet known. The result brings divided government for the rest of Trump’s presidential term.

Democrats will control the legislative agenda and Senate confirmations, while the president keeps his executive powers, including over foreign policy.

How this shapes the US approach to Iran and the wider Persian Gulf remains to be seen.

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Price commentary courtesy of Crown Gas and Power