Wholesale prices rebound amid long term supply uncertainty

Falling wind output and long-term supply uncertainty played into the bullish sentiment at the NBP on Thursday, with small gains posted across much of the curve.

The biggest increases were observed at the front end, with both the front-month and front-season contracts registering gains of around 2p/therm (0.07p/kWh) when compared to their previous close.

Wind output has remained consistently below average so far in November, and although gas-fired power demand fell from 55% (on Wednesday) to 47.5% of the generation mix on Thursday, low wind is expected to bolster gas for power demand over the next few sessions (data from National Grid).

An uncertain US supply outlook may have also supported NBP contracts. The Democratic administration is reportedly expediting an environmental study that has the potential to obstruct Republican plans to increase oil and gas output, specifically new LNG exports projects. European gas hubs will no doubt be monitoring such developments closely as LNG contributes a considerable proportion of regional supplies, with the US being the biggest exporter of the fuel.

This morning, gas prices have so far continued their upward trajectory, with the Summer 25 front-season contract having already tested the 100p/therm (3.4p/kWh) psychological level.

However, most contracts have eased slightly as the morning progresses, with key contracts now being offered circa 2p/therm (0.07p/kWh) above their previous settlements at the time of writing.

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Price commentary courtesy of Crown Gas and Power