Gas Market
While the news of the extension of the ceasefire between the U.S. and Iran was well received earlier in the week, talks to end the war are no closer. The blockade of Iran-linked shipping is ongoing in the Strait of Hormuz and Donald Trump posted yesterday that missions to clear mines in the channel would be stepped up and that any small Iranian ships in the way would be destroyed. Iran have kept to their position that they will not enter talks until the U.S. remove the blockade. NBP futures opened higher and the near curve traded up by around 5-6.00p per therm above Wednesday’s close during the morning session. In the afternoon, the front months fell back leaving the May and June contracts post gains of 2.45p and 2.63p respectively. Prompt prices reacted to the near curve gains and also forecasts for lower wind generation for Friday which is likely to boost gas demand going into the weekend.
Power Market
The ongoing tensions in the Middle East continued to drive natural gas futures higher yesterday and buoyed UK baseload power prices. Near futures tracked the early gains on the NBP curve and continued to follow gas prices lower in the afternoon session. The front month, May, was marked lower at the close, but the more heavily traded June contract settled £0.25/MWh higher. Further out, the Winter was assessed at £93.73/MWh, up £0.63/MWh.
Wind generation is forecast to drop below 2.0GW on Friday and remain below average levels into next week which boosted the prompt yesterday. Baseload for the Day ahead settled at £101.67/MWh, which was up 8.3% or £7.82/MWh, but the average price for the month so far is £82.20/MWh.
Oil Market
The struggle for control of the Strait of Hormuz continued to drive crude oil prices higher yesterday. Brent, the global benchmark, gained 3.1% or $3.16 a barrel taking the increase this week to $14.69 a barrel. Donald Trump posted that the U.S. Navy would step up efforts to clear mines from the channel while also saying that any Iranian small ships in the way would be destroyed. Meanwhile efforts to restart a dialog continue, but peace talks seem unlikely while there is such a gulf between both parties as Iran have consistently said they will not re-enter talks while the U.S. continues its blockade of the Strait. At the close, the June contract for Brent settled at $105.07 a barrel, West Texas Intermediate, the U.S. benchmark settled $2.89 higher at $95.85 a barrel.
Markets this morning
A three-week extension to the Israel-Lebanon ceasefire was announced by Donald Trump last night and it’s hoped that it could open the way for peace talks between the U.S./ Israel and Iran. The markets opened firmer this morning, however, latest trades for the near NBP curve have seen the early gains pared back. The May contract last exchanged at 112.00p per therm, a gain of 1.11p from last night, further out, the Winter contract is 1.70p higher at 112.75p which is almost a penny below the high for the morning. Brent for June delivery is trading $1.79 a barrel up at 106.86 a barrel while in the carbon markets EUAs are mixed with Dec-26 adding €0.65/ tonne while Dec-27 is down €0.40/ tonne.
