Markets This Morning
Energy prices have rebounded sharply this morning as markets reassess the prospects of a near-term agreement between the US and Iran. Iran reportedly told Pakistan’s army chief that negotiations with Washington would not begin until its demands had been met, dampening hopes of a diplomatic breakthrough. Meanwhile, maritime shipping data indicates that at least 18 attacks on vessels have been recorded over the past two weeks, with Iranian attacks extending beyond the Strait of Hormuz into the Gulf of Oman. The widening geographical scope of these attacks poses further risks to Gulf crude loadings and ship-to-ship transfers. The front-month UK NBP Nov-26 gas contract is trading 8.39p higher at 217.75p/therm, reversing yesterday’s losses, while front-month Brent crude has gained $1.25 to $110.04/bbl.
Yesterday in Summary
UK wholesale gas prices fell sharply on Tuesday amid volatile trading, with the front-month NBP contract declining 8.10p to 209.36p/therm as reports of renewed US-Iran mediation efforts raised hopes of de-escalation. GB baseload power followed gas lower, with the front-month contract falling £3.25 to £165.50/MWh, while stronger wind generation weighed on day-ahead prices. European carbon prices edged 0.3% higher to €85.65/t, supported by expectations of stronger fossil fuel demand. Brent crude retreated from a five-month high of $111.99/bbl to settle at $108.79/bbl, as unverified reports of a potential US-Iran compromise prompted a wider sell-off across energy markets.
