Energy Markets Rise Again as Strait of Hormuz Attacks Continue

Market Update:

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• Wednesday’s market prices traded higher than Tuesday’s close.
• This morning, prices have once again opened higher, as news of further Iranian attacks on vessels in the Straits is reported.
• The International Energy Agency (IEA) on Wednesday agreed to release a record 400 million barrels of oil from strategic stockpiles to combat a spike in global crude prices, with the U.S. contributing the bulk of the supply.
• Two fuel tankers were set ablaze killing one crew member, after projectiles struck four vessels in Gulf waters.
• Oil prices, having edged above $100/bbl overnight, currently sits around $96/bbl.

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NATURAL GAS:

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European Gas markets have seen a move up in this morning’s session with the market still firmly focused on any developments in the Middle East.

The front month Apr-26 NBP contract is trading at 133.40p/therm at the time of writing whilst the TTF equivalent has pushed above the €50 level trading at €52.40/MWh. The Sum-26/Win-26 spread remains positive, as it has for all of this week with the NBP Sum-26 trading at 127p/therm and the TTF equivalent contract at €51.1/MWh at the time of writing.

Storages in Europe are last reported at 29.27% full around 3% up on 2022 levels and trailing last year by almost 7%. German storages are last reported at 21.64% full, below the European averages whilst Dutch storages are now below 10% full amidst calls from the grid operator in the Netherlands for the government to build a strategic reserve.

Reports in the market suggest Shell has declared force majeure for some LNG cargoes sourced from Qatar amidst the closure of Qatari LNG facilities due to strikes from Iran. The situation in the straight of Hormuz remains one market participants are keeping a close eye on following the announcement from Trump of a special insurance for vessels backed by the federal government and subsequent continued strikes of vessels in the region as recently as the early hours of this morning.  Trump this week has made signals that he wants the war to end soon.

Temperatures for NW Europe continue to look mild for March despite a sharp drop this weekend notably in France and the UK. From the week of the 21st of March forecast have temperatures dropping to close to seasonal normal levels for much of NW Europe.

ELECTRICITY:
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European power prices have also seen a move up in early trading this morning having tracked the moves in gas for much of the week.
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The front Month Apr-26 UK Baseload contract is trading at over £100 this morning at £101/MWh having settled last night at £95.25/MWh. The Cal-27 DE Baseload contract is trading at €93.75/MWh this morning having settled last night at €91.80/MWh.
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Wind speeds in NW Europe are significantly above seasonal normal for today and tomorrow bringing in some good renewable production into the balances. At the time of writing, in both Germany and the UK, wind generation is adding a significant portion to the supply mix making up the largest portion.
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Oil prices continue to be extremely volatile this week. Yesterday, the IEA pushed for the largest ever draw on strategic Oil reserves with 400 million barrels requested from member states. Something that has been agreed on by all member states to try and sure supply following the closure of the Strait of Hormuz. This announcement saw a cooling of Oil prices yesterday trading closer to the $91/Barrel for Brent. Overnight reports of attacks on Oil tankers trying to transit the route causing damage and reports of a death on board one of the vessels has pushed oil higher now just below the $100/Barrel level having been there earlier this morning.

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Latest Price:
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                            BID                      OFFER

Sum-26:            £94                        £97

Win-26:             £96.5                    £97

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Latest Gas & Power Annual Chart:
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