Wholesale gas and electricity rose again on Thursday. Importantly, the 1-year electricity price is now over £80/MWh and that was before the escalation in the Middle East overnight. We expect price spikes in the coming days, but these typically settle down again 2–3 weeks after tensions ease. With fossil fuels down to 20% of production, the actual cost last week was £74/MWh, and we expect this to decrease over the summer, geopolitical situations permitting.

Gas: Gas prices rose yesterday. In the prompt, prices rose due to a rise in domestic demand with the grid expecting to close short by 5.2mcm due to the weather. Curve prices rose as British storage levels recently fell by 20mcm, increasing demand on the seasonal contract. The markets have opened bullish this morning, with prices opening 3% stronger due to the attacks by Israel on Iran.

Power: Power prices rose yesterday after a rise in domestic demand combined with a low output of renewable generation. Prompt prices rose with wind generation expected to generate 5GWs/day over the weekend. Curve prices were supported by the gains in the wider energy complex. This morning power prices have risen by 2%, tracking gas and oil markets due to Israel’s attacks on Iran.

Oil: Oil prices surged upwards yesterday after markets reacted to Israel’s air strikes on Iran, hitting potential nuclear sites and military targets. Prices rose 7% from $74.37/barrel to above $78/barrel.

Carbon (EU ETS): The ICE Dec-25 continued its recent bullish run to €75.39/t yesterday. The contract opened at €76.45/t this morning and is currently trading at €76.14/t.

Carbon (UKAs): The ICE Dec-25 continued to gain yesterday, eventually settling at £53.92/t. The contract opened this morning trading at £54.98/t.

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