Prices remain volatile as war in Iran continues

The NBP curve recovered on Thursday, but market volatility remained elevated as participants continued to price in heightened geopolitical risk linked to the war in Iran.

Risk premiums across the curve stayed well supported, driven by ongoing disruption to global energy flows following Iran’s effective closure of the Strait of Hormuz.

The restriction continues to limit seaborne LNG and crude oil exports, tightening global balances and underpinning European gas prices.

Additional support came from an unplanned outage at Norway’s Ekofisk field, which removed around 5 mcm/d of supply.

The power market traded broadly in line with the wider energy complex, moving higher ahead of the bank holiday weekend.

Price strength was supported by the firmer tone across gas and oil markets, while generation fundamentals remained relatively balanced, with wind and gas output running at comparable levels.

Broader energy sentiment was further lifted by a sharp recovery in crude oil on Thursday, which closed 8.5% higher day-on-day.

Oil markets continued to display heightened sensitivity to geopolitical developments, particularly ongoing events in the Middle East, reinforcing volatility across the wider energy complex and lending indirect support to power prices.

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Price commentary courtesy of Crown Gas and Power