Wholesale gas and electricity prices jumped yesterday in response to the renewed attacks in the Gulf and the damage caused to the Saudi pipeline.
We expect this volatility to continue for some time and are seeing, at a retail level, that two- and three-year prices are no longer significantly cheaper than one-year prices. This tells us that traders believe that this war could drag on.
| Gas: Gas prices gained yesterday, throughout the curve. A delay in talks over the reopening of the Hormuz Strait pushed prices higher. An unplanned outage at the Norwegian Ormen Lange gas field further supported prices in the prompt. This morning’s prices have eased slightly versus last night’s settlement. Power: Most power contracts gained in value yesterday, tracking bullish sentiment in NBP gas as geopolitical tensions continue to escalate. Early market movement is down on last night’s close. Oil: Oil prices surged to c.$110/bbl yesterday, largely driven by the shutdown of Saudi Arabia’s East – West pipeline. Carbon (EUAs): The ICE Dec-26 closed at €87.99/t last night. The contract opened this morning at €88.09/t. Carbon (UKAs): The ICE Dec-26 traded to £62.56/t yesterday, opening at £62.80/t this morning. |
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