Prices resume upward trajectory amid sensitive geopolitical backdrop
The market resumed its upward trajectory on Thursday, with the Summer 26 front-season contract closing 1p/therm (0.034p/kWh) higher after a day of sustained, heightened volatility that saw prices struggling for a clear direction.
The curve remains highly sensitive to the broader geopolitical backdrop, with limited progress in Russia–Ukraine negotiations and high-stakes talks between the US and Iran scheduled for Friday.
Altercations between the US and Iran amidst a strong military buildup in the Arabian Sea have drawn the attention of commodity markets. Market participants will be closely following the talks for signs of either deescalation or further deterioration of diplomatic efforts.
The power curve moved inversely to gas on Thursday, instead opting to ease off slightly, reversing small gains accrued on Wednesday.
Wind output averaged at a high rate of 20.8GW, comprising 50.1% of the GB power mix, limiting gas (CCGT) to just 9.8GW (23.6%).
A large sell-off on the European carbon market likely filtered bearish sentiment into contracts further out.
ICE data shows that the Carbon EUA benchmark contract posted sharp losses of 5.7% when compared to its previous settlement.
Brent Crude also recorded a sizeable pull back, stepping 2.7% lower day-on-day, serving as a secondary source of pressure.
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Price commentary courtesy of Crown Gas and Power 