On Wednesday, wholesale gas and electricity prices crept up across the board, with no exceptions.
We expect continuing instability until there is some kind of agreement in the Strait of Hormuz, and for now, we just need to go along with the ride.
For those of you signing contracts, our recommendation is not to commit to anything beyond 12 months because the currently inflated prices will definitely drop back to the levels seen before the Iran war, which were below 20p per kilowatt-hour for electricity and in the low 3p per kilowatt-hour range for gas.
There is fundamentally a huge oversupply of gas in the world. It’s just that Hormuz is creating an imbalance at the moment, although there are zero global gas shortages, even though Qatar is exporting nothing when it is responsible for approximately 20% of global production.
| Gas: Gas prices rose yesterday as the initial 60-day negotiating window between the US and Iran is due to end on 16 August, with nothing being resolved. In the prompt, wind generation is expected to fall, further supporting demand for gas-fired generation. Prices have opened softer this morning. Power: Power prices continued to rise yesterday, supported by gains in the gas market. High temperatures and low wind generation (3.6GWs/day) have further supported gains in the prompt. Prices have opened bearish this morning. Oil: Oil prices edged upwards yesterday as attacks on ships in the Strait of Hormuz and negotiations to end the war and reopen the Strait hit an impasse. However, gains were limited due to forecasters cutting expected global demand for the remainder of 2026. Prices have opened softer this morning as investors weighed up weaker demand projections. Carbon (EUAs): The ICE Dec-26 traded to €81.99/t yesterday. The contract opened this morning at €82.15/t. Carbon (UKAs): The ICE Dec-26 fell to £58.40/t yesterday. Opening this morning at £58.68/t. |
#gas #electricity #businessutilities #businessgas #businesselectricity