Wholesale prices drop amid strong gas imports

The wholesale market recorded its largest single-day decline in nearly three weeks, closing just above the key psychological level of 90p/therm.

Steady, uninterrupted gas production from Norway and the UK helped to cushion the impact of geopolitical tensions, particularly concerns surrounding President Trump’s ceasefire ultimatum, which threatens to disrupt energy supplies across Europe if Russia is unable to secure a ceasefire with Ukraine.

Unlike the EU, the UK does not purchase any Russian gas or crude oil, officially banning imports in December 2022 as part of sanctions following the war in Ukraine.

However, the deeply integrated nature of European gas infrastructure means that shortages in other parts of the continent could still drive UK prices higher.

Similar reductions were observed across the baseload power curve as well, driven in part by a significant surge in cross-border imports, which rose sharply from 2.7GW to 6.7GW.

This influx of imported power provided crucial support to the system, effectively offsetting the impact of reduced wind generation and leading to only a modest increase in gas-fired generation when compared to the previous day.

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Price commentary courtesy of Crown Gas and Power