Markets This Morning
Energy prices are extending their gains this morning, building on Tuesday’s rise as the renewed U.S.-Iran conflict continues to threaten prolonged supply disruption through the Strait of Hormuz. Iran stated its desire to return to the agreements of June’s memorandum of understanding that had previously halted the conflict if the U.S. were willing to reciprocate, markets are continuing to price in supply risk until there is a signal of that becoming an actuality. UK wholesale gas prices are trading up 2.58p since the market opened at a price of 183.90p per therm. Crude oil prices are seeing a less pronounced rise, the front-month Brent contract is up $0.25 this morning at a price of $94.90 per barrel.
Yesterday in Summary
UK wholesale gas prices increased through the day yesterday as the renewed U.S.-Iran conflict revived fears of prolonged disruption to Middle East energy supply. Shipping data showed just five vessels had transited the Strait of Hormuz on Monday, well below the 10-day average of fourteen. U.S. President Trump threatened further strikes on Iran and Tehran vowed to respond unless Washington honoured June’s memorandum of understanding. At the close, front-month NBP was up 13.47p at 178.29p per therm. In the crude oil markets, Brent for front-month delivery climbed by $4.16 to settle at $94.65 a barrel, its highest level since July 24th.
