Prices react to reports Iran had again closed the Strait of Hormuz

The NBPs curve firmed on Monday after reports that Iran had again closed the Strait of Hormuz.

On Sunday, US Central Command stated on X that it had seized an Iranian-flagged container ship suspected of attempting to breach the US blockade of Iranian ports in the Persian Gulf.

Despite the geopolitical backdrop, market reaction was relatively muted, this likely reflected elevated risk premia already embedded in the curve ahead of the weekend, as fast-moving developments encourage caution and pre-emptive pricing of potential reversals.

Reduced Norwegian flows due to maintenance and below-average EU storage levels served as additional, longer-term sources of support.

The baseload power curve also posted modest gains on Monday, largely driven by the recovery on natural gas and crude oil markets.

According to data from ICE, the Brent Crude benchmark contract posted gains of 5.6% when compared to Fridays close, a proportionately larger move than the NBP equivalent.

Last week saw a decrease in overall wind generation, with an average of 10.5GW recorded Monday to Sunday, down from 12.4GW the week prior.

This, in turn, supported demand for costlier gas-fired power and cross-border imports.

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