Prices increase significantly amid reports of renewed conflict in the Middle East
Gas prices surged at the NBP on Tuesday after reports that vessels had been struck in and around the critical Strait of Hormuz shipping corridor.
It was widely reported that the Qatari LNG tanker ‘Al Rekayyat’ was hit in a suspected drone attack within the strait, coinciding with reports that the Liberian-flagged crude tanker ‘Wedyan’ was also immobilised nearby.
The situation escalated sharply overnight after the US launched widespread strikes against Iranian air-defence systems, anti-ship missile sites and more than 60 small military vessels in and around the strait (US Central Command).
Iran responded by targeting US military assets in Bahrain and Kuwait.
The bulls have retained a firm grip of the market this morning, with the Winter 26 front-season contract currently being offered at 121p/therm (4.13p/kWh), 6p/therm above its previous settlement, at time of writing.
It was also a bullish session for baseload power contracts, although the extent of the gains was not quite as dramatic as those seen elsewhere in the energy complex.
A significant drop in power output was observed again yesterday, but the system operator chose to rely primarily on interconnector imports to cover most of the resulting generation shortfall.
As a result, gas-fired generation only recorded a relatively modest increase day-on-day, limiting some of the upward push on power prices despite the concerning geopolitical backdrop.
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Price commentary courtesy of Crown Gas and Power 