Mixed price moves as US appears to be moving towards economic pressure over military intervention
Gas prices weakened slightly on Tuesday, pulling back from the second highest settlement price of the year after encountering firm resistance above 150p/therm.
It was a day of two halves, with the bulls attempting to extend Mondays gains in early morning trade. The Winter 26 contract crept past 151p/therm but attempts to push higher lost momentum by the afternoon and the front-season ultimately closed at 144.96p/therm (4.9p/kWh), a modest 2.8% lower when compared to the previous settlement.
Some renewed optimism for a diplomatic route out of the US-Iran conflict in yesterdays session, after Pakistan’s Defence Minister said that ‘things are shaping up in favour of peace’, and Donald Trumps rhetoric shifted toward economic pressure over military intervention.
Geopolitical developments continued to serve as the primary driver for baseload power prices.
Lower renewable generation so far this week has added to underlying support at the front-end, but contracts further out likely shed some risk premium in yesterday’s session as participants viewed recent rhetoric from the US and third-party mediators as a positive signal for global energy flows.
Strong solar is forecast for the next few days but the onset of Europe’s fifth heatwave this year has the potential to stretch import capacity for the UK. NESO, the state-owned system operator for Great Britain, has issued an Electricity Margin Notice for the hours of 18:00 to 20:00, calling on generators to make extra capacity available due to an extraordinary drop off in solar output expected over this period due to the partial solar eclipse.
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Price commentary courtesy of Crown Gas and Power 