NBP: Strong upward pressure
In October, the NBP price saw a spectacular 44% rise to €16.4/MWh ($5.3/MBtu). This is slightly higher than the price of oil-indexed contracts, a sign that the market is tightening. The NBP continued to climb in early November and now stands at about €20/MWh ($6.5/MBtu). With the slowdown in exports from the United Kingdom to Europe via the Interconnector, this phenomenon now affects all European gas prices.
NBP: down in August and September, up in October
The slight pressure on the NBP price in the month of June has turned out to be transient, due to temporary supply constraints. Since then, it has fallen steadily, losing nearly 6% in July, 13% in August and another 6% in September. The September average was €11.4/MWh ($3.7/MBtu) compared to €14.8/MWh ($4.9/MBtu) in June, a drop of 23%.
September saw strong volatility in the NBP price. Early in the month, it stayed within an extremely low range (€8.3 to 11.3/MWh), subject to significant variations in supply and demand. This temporary weakness in the price also reflected that the Interconnector was saturated during this period, preventing the export of surplus gas to the Continent. The NBP, tending to trend upward since September 14, remained very volatile at €12 to 14/MWh ($3.9 to 4.6/MBtu).
Unsurprisingly, given the present context of uncertain demand and looming gas bubble, with Europe as a whole well (over?) contracted in long-term supply contracts, the present update shows little difference from the previous, one-year old version. Indeed, no new contract was added to the database.