Wholesale gas and electricity prices continued their upward trajectory on Friday, although developments over the weekend in terms of the volume of oil shipping via the Omani route through the Strait of Hormuz may lead to reductions in the coming week.
This is a very volatile situation, and if you can avoid signing contracts at the moment until things calm down, that would be a wise move. If you have to/want to sign now, our recommendation would be a 12-month contract, in the hope that the conflict will be over at the end of that term and pricing will by then have returned to a level of ‘normality’.
| Gas: Gas prices rose at the end of last week due to bullish geopolitical sentiments. The US president threatened Iran’s trading partners with economic sanctions. China declared that it does not support the additional US sanctions and Iran condemned the announcement as “illegal and inhumane”. European gas storage also remains a concern, pushing prices higher. Prices have softened this morning, tracking the oil markets as traders await details of the threats. Power: Power prices tracked the bullish gas market at the end of last week. Carbon prices also rose, further supporting the power market. Prices have opened softer this morning. Oil: Oil prices rose at the end of last week as the US president continued to threaten economic sanctions on Iran’s trading partners, raising tighter supply concerns. This morning, prices have eased in the open as traders await to hear the details of the sanctions. Carbon (EUAs): The ICE Dec-26 closed at €82.61/t last Friday. The contract opened this morning at €82.73/t. Carbon (UKAs): The ICE Dec-26 traded to £59.49/t last Friday, opening this morning at £59.44/t. |
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