Prices edge higher as Memorandum of Understanding expiry date looms

The Winter 26 front-season edged higher on Friday, with the prices going up by 10.7% as US-Iran diplomacy stalls and the heatwave ramps up supply concerns.

The 60-day Memorandum of Understanding signed between the US and Iran to bring about an end to the conflict is expected to expire this evening (Monday 17th August).

Progress appears to be completely stalled at the moment, with the Strait of Hormuz still a massive sticking point for both sides.

On Friday, the US President said that he intended to designate the vital shipping route as an overseas territory of the United States.

Given the escalating geopolitical rhetoric around the Strait, market volatility is set to remain elevated as market participants await the official expiry of the truce tonight.

Baseload power prices continued to track gains natural gas and crude oil markets, pushing higher over the course of last week.

Reduced output from renewable generation added further upward pressure, leaving the grid increasingly reliant on gas-fired plants and imports.

The momentum has carried straight into Monday morning, with system balancing prices spiking above £350/MWh in the early hours of this morning amid tight margins, with wind exceptionally low so far today and only accounting for around 1.7% of the generation mix.

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