Soaring temperatures across Europe hampers storage injections

Small, mixed moves were observed at the NBP on Wednesday as the market struggled to establish a clear direction.

Soaring temperatures across Europe continued to bolster cooling-related power demand, supporting gas-fired generation and diverting supplies from other sources such as storge injection.

According to data from Gas Infrastructure Europe, the onset of well-above average temperatures in continental Europe correlated with injections falling to a near 6-week low on Tuesday 1st July.

Contracts further out saw small, incremental losses amid cooling geopolitical tensions in the Middle East, with US President Trump claiming that Israel had ‘agreed to the necessary conditions’ for a 60-day ceasefire with the Hamas-led administration in Gaza.

Baseload power prices adopted a more broadly bullish tone, posting modest gains across much of the pricing curve.

This upward momentum was supported by reports that France had to scale back output at several nuclear power stations, including a full shutdown of the Golfech No.1 reactor in the southwest.

Nuclear facilities depend on a steady flow of water to cool reactor cores safely and efficiently. During heatwaves, environmental and safety concerns can force operators to reduce output, as seen recently.

These constraints have limited cross-border balancing flexibility in Europe, reinforcing the increases across regional markets.

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Price commentary courtesy of Crown Gas and Power