Wholesale gas and electricity prices continued to rise on Wednesday amid mounting tensions in the Strait of Hormuz.
While military action continues, prices will remain volatile in global markets. Although the UK is not dependent on the Gulf for LNG, the reduced supply is driving up global commodity prices as countries that were dependent on the UAE have to look elsewhere.
| Gas: Gas prices continued to rise yesterday due to increasing risk premiums as the market anticipated an escalation in the war between the US and Iran. Prices have opened slightly softer this morning as traders look to take profits. Power: Power rose alongside the gas and carbon markets yesterday. In the prompt, low renewables also led to an increased demand for gas-fired generation as wind was expected to generate below average. Prices have opened lower in the early window. Oil: Oil prices rose slightly yesterday, reacting to a larger than expected inventory, whilst a new wave of US strikes on Iran targeted Iranian military installations aimed at limiting the country’s ability to hit cargoes in the Strait of Hormuz. Prices have opened lower this morning as traders took profits while assessing the risks of Iran’s escalation. Carbon (EUAs): The ICE Dec-26 traded to €81.16/t yesterday. The contract opened this morning at €80.81/t. Carbon (UKAs): The ICE Dec-26 closed at £60.18/t last night. Opening this morning at £59.51/t. |
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