Prices extend upward trajectory amid escalating geopolitical tensions

Gas prices extended their upward trajectory on Wednesday amid persistent supply concerns and escalating geopolitical tensions.

The ongoing conflict between the US and Iran remains a key focus for markets, with both sides exchanging further strikes over the past 24 hours.

The US reportedly struck two targets and disabled an unladen oil tanker bound for Iran’s Kharg Island, while Iran launched overnight drone attacks targeting US military bases in Bahrain, Jordan, and Kuwait.

The escalation continues to heighten supply concerns, particularly regarding shipping through the Strait of Hormuz. Although the waterway remains open, vessel movements are currently restricted to routes approved by Iranian authorities.

On the power front, baseload prices mirrored the gains seen in the gas market, like also supported by the ongoing US/Iran conflict.

In addition, a sharp decline in renewable generation perhaps reinforced the bullish sentiment. According to National Grid data, wind-output fell by more than 40% day-on-day, subsequently increasing reliance on CCGT offtake which increased by over 38% when compared to the same period.

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Price commentary courtesy of Crown Gas and Power