Wholesale gas and electricity prices rose on Friday in line with the increased GO political tensions in the Middle East and we expect further rises until things calm down.
Frustrating as the market fundamentals remain strong, but these GO political issues come from left of field and always unsettle the markets. As an indication of this, gold is at the highest level it has been for over two years and that is always a safe haven in times of uncertainty.
| Gas: Gas prices rose last Friday, due to rising geopolitical tensions, combined with colder weather forecasts in the near term. Ongoing tensions in the Middle East have raised further supply concerns for LNG cargoes coming through the strait of Hormuz. Power: Power prices rose at the end of last week, following the bullish movements of the wider energy complex, with gas, carbon and oil all increasing. Additionally, a full capacity outage at EDF’s Torness 640MWs nuclear reactor has been announced, and is due to come back online on 20 June. Oil: Oil prices rose at the conclusion of last week due to the ongoing tensions in the Middle East. Israel’s bombing of Iran’s embassy in Damascus increased the risk of further supply disruptions. Price gains were limited as the IEA reduced its forecast for Global oil demand by 120,000 barrels/day for 2024, due to increasing number of EVs and improving energy efficiencies. Carbon (EU ETS): The ICE Dec-24 continued its recent bullish run to €71.55/t last Friday. This morning the contract is currently trading at €70.40/t, after opening at €71.39/t. Carbon (UKAs): The ICE Dec-24 continued to rise last Friday, eventually settling at £38.13/t. The contract is currently trading softer at £37.00/t this morning. |
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