Unbelievably, given the events of the previous few days, wholesale Gas and Electricity prices dropped on Monday.
In light of historic movements at times of GO political uncertainty, we take this as further evidence that TPG’s position, that prices will fall due to strong market fundamentals, is a valid view.
There will un-doubtable, be bumps along the road, and traders still have expensive positions that they need to close out while minimising their losses.
For now, our view on Friday to contract now, for contracts end of May has been changed and our current view is to wait and renew at the latest possible date, in order to benefit from further reductions.
| Gas: Gas prices fell yesterday after tensions in the Middle East were re-evaluated. However, losses were limited due to several bullish movements. Supply concerns impacted the market due to an unplanned outage at Norwegian Nyhamna gas plant, and only two LNG cargoes due to dock in the UK by the 21 April, which is five less than the same period last year. Total gas demand has also been forecast to increase by 4%, further limiting price losses. Power: Power prices continue to be driven by the wider energy market. Power prices fell yesterday following a correction in the oil market, and declining prices in the gas and carbon markets. Oil: Oil prices corrected themselves yesterday as traders re-evaluated their positions, and a strong $USD limited trading activity. After Israel destroyed Iran’s embassy in Damascus, the market expected Iran to retaliate, and now the market waits to see if or when Israel will respond. Iran produce 3 million barrels/day and is one of OPEC+’s major producers. Carbon (EU ETS): The ICE Dec-24 fell slightly to €70.55/t yesterday. This morning the contract is currently trading at €71.03/t, after opening at €70.47/t. Carbon (UKAs): The ICE Dec-24 fell to £36.04/t yesterday, reversing the previous session’s gains. The contract has yet to start trading at the time of writing. |
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