NBP gas prices retrace but markets nervous as Iran conflict crosses 2 month mark

NBP gas prices retraced on Thursday as markets continued to assess a string of agitational comments from high-ranking Iranian and US officials regarding the conflict, which has now crossed the 2-month mark.

The ceasefire is still holding in a conventional sense though negotiations have stalled, and prospects have taken a hit based on this week’s rhetoric, all while the Strait of Hormuz continues to be heavily restricted for critical oil and gas cargoes destined for international markets.

Alongside a busy Norwegian maintenance schedule, the UK Continental Shelf is expected to see restrictions over the next fortnight. The SAGE pipeline system in the North Sea will be unavailable on 6th May, removing supply at a rate 57mcm/d and the Bacton terminal will see the loss of 27.3mcm/d from 9th to 13th May.

A similar, downward correction posted across the power curve, with seasonal contracts finding pressure from adjacent energy markets like gas and oil, all while the prompt and near-curve eased in response to stronger renewable generation.

According to data from Elexon, wind turbine output served as the single largest source of power on Thursday after reaching 15.6GW (46.5%). This deeply supressed gas-fired power demand, which fell to a fractional 1.9GW (5.8%) over the same period. Overall, renewable sources accounted for 65.7% of generation.

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