Markets This Morning
A temporary deal to reopen the Strait of Hormuz is close to an agreement according to news reports this morning. Officials from Oman and Iran have agreed routes for entry and exit of the strait although it is not clear if each passing will be subjected to a tariff. Washington was against any tolling of the strait so it will be interesting to see President Trump’s reaction. UK wholesale gas prices opened firmer this morning with the front month trading to a high of 143.50p per therm but almost all the early premium has been reversed over the last hour with September last exchanging at 137.52p, just over a half a penny up on last nights close. Crude oil prices have also reversed most of the morning’s gains with Brent for October last going through at $82.73 a barrel.
Yesterday in Summary
UK wholesale gas and crude oil prices rose on Thursday as uncertainty over the outcome of Iran’s negotiations with Oman, coupled with reports of renewed attacks on Saudi vessels in the Red Sea, regained the geopolitical risk premium lost in the previous sessions. An Iranian source indicated that any deal to reopen the Strait of Hormuz would leave Tehran in control of a guided shipping route into the Gulf, while Iran is said to be weighing a bill that would bar US and Israeli vessels from the strait. The NBP front-month contract rose 8.87p to settle at 136.91p per therm, with the Day-ahead contract up 3.00p to 133.87p per therm. Brent crude rose $3.04 to settle at $82.49 per barrel.
