Wholesale gas and electricity prices continued to rise on Thursday, mainly as a result of the increasing tensions in the Middle East, but also because of increased LNG demand in Asia and driven by heatwaves in Japan and South Korea which have lead to cargoes being diverted. Our expectation remains that this is short term and will rebalance once the immediate issues calm down in the Middle East.
On the generation front, the price rose to £74.60. mirroring the rise in wholesale prices and reflecting the fact that fossils fuels were again the dominant producer at 30% of total demand versus 25.7% by renewables.
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| Gas: Gas prices rose alongside increasing demand for LNG in Asia, as Japan and South Korea experience heatwaves, thus increasing cooling demand. Power: Power prices rose yesterday being supported by the gas market gains, with the further out curve taking direction from rising carbon markets. Oil: Oil prices rallied yesterday following concerns of escalating tensions in the Middle East. However, OPEC+ confirmed an easing on their supply cuts which limited gains within the session. Carbon (EU ETS): The ICE Dec-24 settled at €71.18/t yesterday. The contract is currently trading at €71.14/t after opening at €70.81/t. Carbon (UKAs): The ICE Dec-24 closed upwards at £39.91/t yesterday. This morning the contract is currently trading at £40.00/t. |
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