Markets This Morning
UK wholesale gas prices and crude oil markets extended yesterday’s losses this morning as optimism over a potential resolution to the U.S – Iran continued to build. Although vessel traffic through the Strait of Hormuz remains subdued, fresh talks involving Oman and Iran on a new framework for managing the waterway have boosted expectations that shipping activity could gradually return to normal. Oman has reportedly proposed a joint regional mechanism to oversee the Strait, funded by voluntary transit fees, with the backing from several other countries in the region. The front month NBP contract last went through at 136.91p per therm, down 3.85p day-on-day, while the September Brent contract is trading at a $2.18 discount to last nights close.
Yesterday in Summary
Energy markets declined on Monday after the U.S and Iran paused their exchange of strikes over the weekend. The suspension of military action raised hopes that a diplomatic resolution to the conflict could result in the resumption of normal vessel traffic through the Strait of Hormuz. Although uncertainty regarding the geopolitical outlook remained, the front month NBP contract shed 13.35p day-on-day to settle at 140.76p per therm, it’s lowest close in over a week. Crude oil markets reacted similarly to the renewed optimism, with the front month Brent contract falling by 8.7% by the close to settle at $88.36 a barrel.
UK wholesale gas prices and crude oil markets extended yesterday’s losses this morning as optimism over a potential resolution to the U.S – Iran continued to build. Although vessel traffic through the Strait of Hormuz remains subdued, fresh talks involving Oman and Iran on a new framework for managing the waterway have boosted expectations that shipping activity could gradually return to normal. Oman has reportedly proposed a joint regional mechanism to oversee the Strait, funded by voluntary transit fees, with the backing from several other countries in the region. The front month NBP contract last went through at 136.91p per therm, down 3.85p day-on-day, while the September Brent contract is trading at a $2.18 discount to last nights close.
