Prices reduce further amid calming tensions in the Middle East

Calming tensions in the Middle East and consistent EU storage injections helped reduce gas prices at the NBP on Thursday, with key contracts posting substantial losses.

The US and Qatar brokered ceasefire entered its third day without any further breaches reported.

The de-escalation reduced concerns over potential disruptions to energy infrastructure and shipping through the Strait of Hormuz, as the likelihood of Iran closing the vital route now appears diminished.

Meanwhile, net injections into EU gas storage facilities have continued uninterrupted since 29th March. This sustained effort to replenish reserves has outpaced the injection rates seen in both 2024 and 2023, allowing current storage levels to narrow the gap with previous years.

A broader sell-off across energy markets helped to guide baseload power prices lower on Thursday. Lower gas prices typically reduce the cost of running gas-fired (CCGT) power plants to support system margins, thereby reducing overall power prices.

The supply and demand balance of both the UK and the EU has seen improvement in recent days. Norwegian maintenance has concluded for the time being, boosting pipeline supplies, while milder temperatures have eased the need for power-intensive cooling demand-particularly across continental Europe.

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Price commentary courtesy of Crown Gas and Power