NBP posts biggest intraday gain since the day the US-Iran conflict began

The NBP posted its biggest intraday gains since 19th March, when the outbreak of the US-Iran conflict first sent prices soaring.

Driven by the return of active hostilities across the Persian Gulf, we saw the front-season contract rise to the highest closing price since mid-January 2023.

This market anxiety follows a turbulent day in which six vessels, including four oil tankers, encountered severe disruptions.

Saudi, Liberian, and Indian-flagged ships were struck by projectiles in quick succession, though Iran claimed two of the vessels illegally traversed the Strait of Hormuz and struck naval mines, a narrative firmly rejected by the US.

Geopolitical risk premium was further magnified after the US President indicated a willingness to expand the scope of military strikes to Iranian civilian infrastructure, including power plants and bridges, keeping the market on high alert this morning.

Despite strong renewable generation and muted demand compared to the previous few weeks, power prices gained value for a second day, continuing to be driven primarily by strength across the wider energy complex.

According to data from ICE, the benchmark contracts for NBP Natural Gas and Brent Crude posted gains of 7.9% and 4.6%, respectively.

The most recent flare up in Middle East tensions has had far-reaching consequences for global energy/commodity and financial markets.

This morning, both natural gas and baseload power prices are continuing to push higher, with the NBP front-season (W-26) currently being offered an additional 7.5p/therm (0.26p/kWh) above its previous settlement at time of writing.

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Price commentary courtesy of Crown Gas and Power