Prices correct higher amid uncertainty of peace negotiations in Middle East

NBP gas prices corrected higher on Thursday, stamping out a 4-day bearish streak.

The two conflicts predominately effecting European gas prices, the wars in Iran and Ukraine, have each seen US-linked peace commentary over the past couple of days.

In Iran’s case, Washington’s 15-point proposal delivered via Pakistan was rejected by Tehran as ‘one-sided’ while Iran’s counterproposal was also dismissed by the Trump administration

Separately, President Zelenskyy said in an interview that the US was “tying security guarantees to a Ukrainian withdrawal from Donbas,” though the US strongly denied this interpretation. Ukraine has repeatedly insisted it will not surrender any territory to Russia.

The uncertainty of both conflicts continues to translate into risk premium and heightened market volatility.

Baseload power prices lifted in line with closely linked natural gas, oil and carbon markets on Thursday.

Though averaging higher versus the same 4-day period last week, a sharp drop in renewable power generation likely amplified bullish sentiment along the prompt and near-curve.

According to data from ICE, the Brent Crude benchmark contract moved 5.7% higher when compared to its previous settlement amid continued uncertainty regarding the Iran war.

Carbon prices have also seen a gradual recovery over the past week, climbing 12.6% higher since last Thursday and reinforcing the cost of fossil fuel generation.

If you want to see more information on the wholesale market trends subscribe to our weekly report here.

Price commentary courtesy of Crown Gas and Power