Markets This Morning
UK wholesale gas prices have continued to trade higher this morning, with the front-month contract currently trading at 198.50p/therm, up 4.88p from Wednesday’s settlement. Continued unrest in the Middle East, including an increase in attacks on shipping in recent days, is providing further support to gas prices. A report released overnight showed maritime traffic through the Strait of Hormuz has fallen to its lowest level since July, reversing the signs of recovery seen in recent weeks. Increased attacks by Iran have contributed to the decline in tanker traffic leaving the region. Oil prices are also trading higher, supported by reduced shipping through the Strait and the shutdown of U.S. production ahead of the anticipated hurricane in the Gulf of Mexico.
Yesterday in Summary
UK wholesale gas prices continued higher on Wednesday as renewed tensions surrounding the Strait of Hormuz and increased tanker attacks heightened concerns over Middle East LNG supplies, with September exports down 65% year-on-year. Brent crude edged lower as accelerated International Energy Agency stock releases helped ease supply concerns, although ongoing geopolitical risks and potential production disruption from a developing Gulf of Mexico hurricane provided support. Carbon prices strengthened sharply, with UKAs rising more than 5% on reports of progress towards linking the UK and EU markets. Gains in gas and carbon also supported GB baseload power prices.
