Prices face pressure to stay competitive and attract much needed LNG cargoes

Gas prices struggled to find a clear direction at the NBP on Friday, with curve contracts fluctuating within a tight range close to long-term support levels.

The Summer 26 front-season contract managed to hold below 65p/therm for a second consecutive day, though bearish sentiment appeared tempered by a drive to stay competitive in the global LNG spot market.

Prices can only fall so far before cargoes are diverted to regions offering better margins for US exporters of the super-chilled fuel.

Meanwhile, the latest run of our 14-day model suggests that we will see significantly below average system demand until at least 18th December, coinciding with forecasts of strong wind power generation.

Baseload power prices struck a more decisively bearish tone on Friday with the vast majority of contracts posting small losses when compared to their previous close thanks to a combination of stronger winds and weaker European carbon prices.

According to data from Elexon, wind turbine output comprised 38.2% of the generation mix on Friday, a modest increase day-on-day but up significantly from 27.1% on Wednesday.

Berish carbon prices likely served as a secondary source of pressure, ICE data shows that the Carbon EUA benchmark contract fell 0.5%, easing costs associated with fossil fuel generation across the continent.

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Price commentary courtesy of Crown Gas and Power