Prices correct up amid an uncertain outlook as we approach winter

NBP gas prices posted a firm upward correction on Thursday, with the market still struggling to settle on a clear direction due to an uncertain winter outlook.

The winter supply season officially begins next Thursday, and Europe will enter it with storage still well below normal for the time of year.

Ongoing Qatari LNG cancellations into November and an only partially reopened Strait of Hormuz leave little margin for error.

Softer wind output also lifted gas-for-power demand slightly. Imports from Norway remain severely constrained by a combination of planned and unplanned maintenance.

According to the data from Gassco, only 1.9mcm is expected to flow via Langeled to Great Britain on Friday, accounting for just under 1% of forecasted demand.

Prices have gradually eased so far this morning, giving back some of Thursday’s gains.

Baseload power prices followed gas higher on Thursday, with the near-curve firming as some of the previous day’s relief unwound.

The generation mix offered modest support. Wind output eased from 33.7% to 28.7% of the stack, while gas-fired generation edged up from 28.3% to 28.8%, leaving the two neck and neck.

Renewables slipped to 52.3%, and imports picked up slightly to fill the gap. With only a marginal shift in the mix, power’s gains largely mirrored the move in gas rather than any significant tightening on the domestic grid.

Both gas and power contracts have steadily unwound this morning; with the NBP Winter 26 front-season contract currently being offered circa 9.5p/therm (0.32p/kWh) below yesterdays settlement, practically wiping out the increases posted in the previous session.

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