Wholesale gas and electricity prices continued their upward momentum on Tuesday as a result of the continuing lack of progress in resolving the Hormuz situation. We are confident that, as soon as that is resolved, prices will drop. The million-dollar question is: when will things get resolved?
It was interesting to read today that the UAE is sending oil tankers through the strait with all of their tracking systems disabled, so oil is getting out, which is good news, but no one knows how much. Tankers seem to be staying outside the Strait of Hormuz and taking on loads from smaller vessels that are transhipping them.
| Gas: Gas prices rose across the curve yesterday. Geopolitical uncertainty continues to drive the market upwards. In the prompt, the UK does not expect any LNG cargoes over the next week, further supporting prompt prices. Prices have softened slightly in the market open today. Power: Power prices rose tracking the gas market yesterday. In the prompt, prices were further supported by low renewable generation forecasts. Further out curve prices moved sideways alongside carbon movements. Oil: Oil prices rose yesterday as the market moved to permanently price in Middle Eastern disruptions as the new reality rather than temporary shocks to the market. The 60-day negotiating period has officially ended and neither the US nor Iran are willing to move on the future of the Strait of Hormuz. Prices have continued to rise in the market open today. Carbon (EUAs): The ICE Dec-26 closed at €82.31/t last night. The contract opened this morning at €82.09/t. Carbon (UKAs): The ICE Dec-26 traded to £59.29/t yesterday, opening this morning at £58.72/t. |
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