Prices weaken but are holding significantly above the same time last week
The NBP near-curve weakened into the close on Wednesday as initial shock from the Iran conflict subsided, though prices are holding significantly above the same time last week, supported by ongoing risks to global LNG supply and fears of a prolonged conflict in the Middle East.
The declaration of Force Majeure by major LNG producer QatarEnergy continues to serve as a key price driver and concerns over prolonged disruption in the Strait of Hormuz are being aggravated by low storage levels across Europe.
The ‘Al Kheesah’ arrived at the UK’s Milford Haven last night but is unable to return to Qatar for reloading as things stand, highlighting the uncertainty that lies ahead for the global supply and demand balance as the war enters its sixth day.
Baseload power prices saw a similar downward correction during late-afternoon trade, with benchmark contracts across the wider energy complex (gas, oil and carbon) easing off as the bull run on commodity markets seemingly lost steam.
Further volatility on both gas and power markets is to be expected for the time being as participants react swiftly to reports emerging from the Middle East.
Generation fundamentals were broadly unchanged, with gas serving as the largest source of power so far this week.
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Price commentary courtesy of Crown Gas and Power 