Prices increase further amind fears of pronlonged distruption to global gas and oil supply

Another day of sharp intraday volatility at the NBP, with key contract prices Summer 26 and Winter 26 blocks closing 22.9% and 17.1%, higher respectively, with fears of a prolonged disruption to the global supply balance continuing to fuel bullish price action.

The ongoing disruption of shipping through the Strait of Hormuz remains the primary source of the increases, raising the risk of reduced LNG availability to Europe by placing additional pressure on alternative exporters such as the US, particularly as Asian buyers seek to replace lost Qatari cargoes.

The implications for storage are unclear, stocks are already relatively weak across Continental Europe and a reduction in LNG imports, serving as a major source of supply, could further hamper efforts to rebuild storage over summer.

A similar bull run has been observed across the baseload power curve, with a dip in renewable power generation creating additional pressure, all while events in the Middle East stoke turmoil across the wider energy complex.

According to data from ICE, the Brent Crude contract rose by another 4.7% day-on-day, with Carbon EUA’s and Rotterdam Coal posting gains of 3.9% and 4.5%.

This upswing in the cost of fossil fuels is boosting the cost of generation across Europe’s interconnected power systems, driving up exports and intra-day balancing costs at a time of highly variable wind generation.

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Price commentary courtesy of Crown Gas and Power