Low wind generation pressures wholesale energy prices
Gas prices continued to strengthen at the NBP on Friday amid lower wind output and a bullish wider energy complex.
The bulls retained a firm grip of the market, with the November 24 and Summer 25 benchmark contracts exceeding price levels not seen since mid-August. Last weeks sustained rally resulted in weekly gains of circa 9.1% and 12.4% on each of the contracts respectively, due in part to continued tight supply fundamentals.
A sharp fall in wind power generation will have definitely contributed to the bullish sentiment. According to data from National Grid, wind turbine output fell by 68.5% when compared to Thursdays gas-day which in turn bolstered gas-for-power (CCGT) demand, which rose by 69.1% across the same period.
In other news, Israel carried out retaliatory strikes on Iranian military infrastructure late Friday/early Saturday in response to Iran’s latest missile barrage on 1st October. So far there are no reports that energy infrastructure has been targeted/damaged as was suggested by the Israeli government in the run up to the strikes.
This morning, gas prices have opened in softer territory with the Summer 25 front season contract currently being offered circa 3p/therm (0.1p/kWh) below its previous settlement at time of writing.
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Price commentary courtesy of Crown Gas and Power 