Wholesale gas and electricity prices continued to fall sharply on Wednesday as a result of the peace initiatives taking place in the Gulf region. These decreases are unprecedented, as were the increases, and are entirely the result of geopolitical factors rather than supply issues.
We continue to believe that prices will fall significantly once a lasting peace is established. We therefore urge anyone renewing a contract to choose the shortest possible term, allowing them to benefit from the long-term price reductions we were seeing before the conflict with Iran began.
| Gas: Gas prices fell sharply yesterday over reports of an agreement being made between Iran and Oman to re-open the Strait of Hormuz, allowing for shipping to continue. However, scepticism of a long-standing agreement limited prices from falling further as the market has heard these sentiments many times before. Prices have risen in the open this morning. Power: Power prices fell yesterday, influenced by the gas market. In the prompt, forecasts of lower temperatures and increased wind generation helped soften prices further. In the curve, optimism around the new deal between Iran and Oman fed into the Power market. Prices have opened bullish this morning. Oil: Oil prices were mixed yesterday, with prices settling slightly up. Investors weighed up the revived expectations of a de-escalation between the US and Iran and the possibility of restoring traffic through the Strait. However, Iran denied that peace talks were happening with the US but have made an agreement with Oman on how the Strait will be managed. Oil prices have risen in the early window as traders remain cautious of the Iran/Oman agreement. Carbon (EUAs): The ICE Dec-26 traded to €81.09/t yesterday. The contract opened this morning at €81.54/t. Carbon (UKAs): The ICE Dec-26 rose to £58.86/t yesterday. Opening this morning at £59.35/t. |
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