Prices ease amid growing optimism that conflict in Iran may be approaching conclusion

It was a day of two halves at the NBP on Tuesday as gas prices remained firm throughout morning trade before sliding sharply into the close.

The late day weakness appeared to stem from growing optimism that the conflict in Iran may be approaching its conclusion.

This came despite news of additional US military deployments to the region, including the aircraft carrier USS George H.W. Bush. Market confidence strengthened following an Oval Office address in which President Trump indicated that US operations in Iran could wind down within the next two-to-three weeks.

His remarks were later echoed by Secretary of State Marco Rubio, who suggested the “finish line” of the conflict was now in sight.

These developments coincided with the first notable easing in oil prices March 25th with ICE data showing the Brent Crude benchmark fell by roughly 3.5 $/barrel compared to the previous session.

On the power side, UK baseload prices broadly mirrored the tone in gas, though the moves were noticeably more restrained.

Contracts across the curve held steady through the morning before edging lower in the afternoon as supply concerns eased slightly.

However, a steep drop in renewable generation may have provided a floor for prices.

National Grid data shows that wind output tumbled by almost 56% day-on-day, while solar also fell by over 20% when compared to same period. This subsequently increased reliance on CCGT offtake, which great by 185% when compared to the previous gas day.

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Price commentary courtesy of Crown Gas and Power