Wholesale prices ease amid warmer UK weather forecast

A bearish wider energy complex reduced gas prices at the NBP on Tuesday. Moderate losses were posted across the curve, with the front-month and front-season contracts each falling by around 1.4p/therm (0.05p/kWh) when compared to their previous settlements.

The swift change in sentiment could be attributed to a sharp sell-off on oil markets after news that OPEC downgraded their global oil demand forecast on relatively weak Chinese economic data. Affirmation that Israel would not target Iranian oil infrastructure as part of potential retaliatory strikes for Iran’s attack on 1st October may have also contributed to ease pressure across energy markets.

According to data from ICE, the Brent Crude (Oil) benchmark contract saw day-on-day losses of 4.1% alongside smaller losses on carbon and coal markets.

Revisions to gas demand forecasts may have also helped to unwind bullishness from Monday. The latest run of our 14-day model suggests that demand is now expected to hold below seasonal norms until Tuesday 22nd before lifting slightly above average until at least 29th October.

NBP prices are relatively unchanged so far this morning, with most contracts currently being offered very much in line with their previous settlements, although many are yet to trade at time of writing.

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Price commentary courtesy of Crown Gas and Power