Prices increase further amid ongoing supply disruption caused by conflict in the Middle East

NBP curve contracts pushed higher for a third consecutive day, with Winter 26 reaching the highest settlement price of any front-season contract since 4th April 2023 after closing at circa 157.8p/therm (5.4p/kWh).

Persistent supply disruption from the Middle East, as a result of the US-Iran conflict, and stagnating peace progress, are exacerbating other bullish factors like below average storage levels and the escalating severity of aerial strikes in Russia and Ukraine.

This is set against the backdrop of vessels being targeted in both the Strait of Hormuz and the Strait of Bab el-Mandeb. Both serve as critical gateways for major trade and dangerous conditions are causing oil and gas tankers to choose between sailing dark (switching off location transponders) or diverting entirely, causing localised supply disruption.

A rapid recovery in wind power generation on Tuesday helped to calm prompt prices on Tuesday, but it was unable to steer sentiment for curve contracts, which continued their upward trajectory alongside NBP counterparts.

According to data from Elexon, wind power averaged at a rate of 9.3GW on Tuesday, this comprised 29.5% of the GB generation stack, though gas remained elevated at 10.4GW (33.2%) due in part to a more than 50% decline in solar output when compared to the same day last week.

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Price commentary courtesy of Crown Gas and Power