Nord Pool day-ahead faces storage pressure as El Nino dry risk looms
Nordic power prices face mixed signals from low trading volumes, El Nino drought risk and storage dynamics heading into autumn.
Nord Pool is willing to discuss shifting its opening time an hour later because trading volumes between 08:00-09:00 CET are so thin, the Norwegian exchange said on Thursday (2026-05-21).2
The exchange's openness to restructuring its session signals that volumes in the early window have become a drag on efficient price discovery, feeding through to how Nordic hydrology and storage signals get reflected in clearing prices.2
The broader picture complicates any straightforward bearish read. Nordic portfolio manager Mind Energy said on Tuesday (2026-06-02) that the futures market has failed to price the significant risk of a strong El Nino pattern this year, which could bring a dry summer and autumn to the region. The firm pointed to the Nordic Q4 power price as under-pricing that scenario.4
A dry Nordic summer would tighten the hydro balance just as storage refill demand peaks. The primary market signal for Nord Pool day-ahead is bearish with 50% strength, but the contrarian case rests on supply concerns that would flip that view.4
The European storage backdrop cuts both ways. Italy's energy regulator Arera introduced an incentive on Wednesday (2026-05-20) to push gas storage filling to 90% of capacity ahead of winter, a policy that supports European gas prices and, by extension, power generation costs across the continent.1
The Italian incentive operates alongside the broader continental refill programme, but its 90% target gives traders a concrete threshold to monitor as injection season progresses.1
Gas storage levels elsewhere tell a different story. In the US, working gas inventories sit roughly 6% above the seasonal five-year average, and that surplus shows no sign of narrowing even with weather-driven demand running.6
LNG feedgas flows complicate the picture. Flows hit 19.5 Bcf per day on Wednesday (2026-06-17), up nearly 13% on the week prior, according to market data. That is supply leaving the domestic US market and heading overseas, tightening the domestic balance even as injections run ahead of seasonal norms.6
Earlier data showed feedgas at 18.6 Bcf per day, up 9.3% week-on-week, with Qatar's Ras Laffan still damaged and 17% of the world's largest export plant offline. That outage tightens the global LNG market and supports Asian and European prices, filtering into power generation costs that Nord Pool day-ahead must clear against.5
The bearish consensus on Nord Pool day-ahead rests on ample storage and modest demand expectations. But the El Nino risk identified by Mind Energy cuts against that. A dry summer would force the Nordic system to run thermal assets harder or draw down reservoirs earlier than planned, pushing day-ahead prices up precisely when the market expects them soft.4
A recent EIA storage report showed an injection significantly above analyst expectations and the five-year average, which pressured sentiment in gas markets. That dynamic, if mirrored in European storage data through the summer, would reinforce the bearish view on generation costs.3
The Nordic Q4 power contract is the key instrument to watch, as it captures the transition into the heating season and the point where dry summer conditions would show up as a supply squeeze. If injections across Europe accelerate toward Italy's 90% fill target, day-ahead pressure stays bearish. If hydro inflows disappoint on an El Nino pattern, the Q4 curve reprices first, and the day-ahead follows.1,4