Markets this morning
As hostilities between the U.S. and Iran showed no signs of abating over the weekend, UK wholesale gas prices have continued to rise. The front month contract is showing a 0.97p gain so far this morning, following a ninth consecutive night of U.S. strikes on Iranian military sites. In contrast, crude oil markets are showing modest losses after Iran’s foreign ministry said negotiations with the U.S. could be pursued, raising hopes of renewed talks towards peace. Although risk premium regarding disruption to Strait of Hormuz transit remains, the front month Brent contract last went through at $88.01 a barrel, down 9 cents on Friday’s close.
Friday in Summary
UK wholesale gas prices extended their gains on Friday as escalating hostilities between the U.S. and Iran intensified concerns over security of supply. The front month contract closed at its highest level since March 23rd after gaining 6.77p to settle at 138.75p per therm. The prompt market followed a similar trajectory, supported by elevated gas for power demand, with Day ahead increasing by 6.85p to close at 138.60p per therm. Meanwhile, crude oil prices climbed to a 5-week high amid reports that Iran had instructed the Houthi organisation to prepare to close the Red Sea export route, which has been acting as an alternative to the Strait of Hormuz for Saudi oil exports.
