Significant drops to wholesale prices as ceasefire holds for now

The NBP experienced a sharp downturn on Tuesday, with the Winter 2025 contract shedding approximately 11.6p/therm (0.4p/kWh), marking the steepest single-day reduction for any front-season contract since August 2023.

News of a US brokered ceasefire served as the primary source of support for the reductions, shedding geopolitical risk premiums and driving prices decisively below the key 100p/therm psychological support level at market open.

The market then saw intra-day volatility, as reports that Israel and Iran had exchanged missile fire cast doubts over the integrity of the ceasefire, but conflict deescalated during in the afternoon, indicating that the ceasefire had held for now.

UK power prices also posted significant losses, driven by a broader sell-off across the wider energy complex (gas, oil, coal).

This was largely due to easing geopolitical tensions in the Middle East, which reduced fears of disruption to crude oil and LNG shipments via the Strait of Hormuz, which grants passage to the Persian Gulf.

This key route supports exports from major producers like Iran, Iraq, Saudi Arabia, Kuwait, and the UAE, countries that play a critical role in global fossil fuel supply and, by extension, power generation.

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Price commentary courtesy of Crown Gas and Power