Oil Prices Hold Above $100 as Strait of Hormuz Closure Continues

Market Update:

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• Oil prices remain elevated at $100.85/bbl.
• Iranian leader outlined 3 main points for peace, as well as vowing to avenge the blood of their martyrs.
• He also stated that the Straits of Hormuz would remain shut.
• The U.S. issued a 30-day waiver for countries to buy sanctioned Russian oil and petroleum products currently stranded at sea

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NATURAL GAS:
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Gas markets climbed softly on Thursday with seasonal contracts finding support as the market risk from the ongoing Iran conflict seemed to extend further as sentiment begins to turn towards a longer conflict.

Following comments from the Iranian Supreme Leader who vowed to keep the Strait of Hormuz closed, there were extended gains across the Q3-26 and Win-26 contracts. Expectations seemingly moving to prolonged shutdowns and impacts to supply. The longer Qatari LNG remains offline, the tighter European summer injection will be, pushing risk into the winter.

In the THE Q3-26 climbed 3.5% leading the gains on this contract across Europe as the TTF climbed 3%, along with similar price moves in France and the UK. Based on the settlement prices and converted into the same unit, front month THE remains at a premium to other North Western hubs, holding a €0.30c premium to the NBP.

There has been a lack of interest in German long term LNG capacity bookings, meaning Germany will rely more on spot and flexible cargoes, which has pushed premium into contracts and increased risk for lower injection rates during the summer.

Following a quick spell below seasonal average this weekend, most countries will ramp back up above the norm with temperatures climbing to around 3/4˚C above.

Oil prices settled above $100/bbl for the first time since 2022. Prices had soared through this mark earlier in the week, but retraced gains down before the close. Brent Crude continues to find support from the ongoing closure of the Strait of Hormuz.

ELECTRICITY:
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It was a mixed day in some European power markets with strong moves down on longer term contracts, as near term and front season contracts continued to find support.

With news coming out of the Iran conflict providing more long term risk, prices in the front year found support as the likelihood of the conflict lasting longer than expected increased. In Germany, all Quarterly products climbed by €1/MWh, the UK saw gains of around £2/MWh and France saw gains of around €0.50.

Further out, the calendar products sold off, following huge downward movement on the EU ETS. EU leaders are discussing a call for the European commission to urgently present concrete proposals to lower electricity prices and to reduce carbon price volatility. The Dec-27 EU ETS contract lost €3.60 on Thursday, the lowest price in nearly a year.

The weekend contract found support as wind generation is expected to be poor, before ramping back up above seasonal average for the working week.

Oil prices settled above $100/bbl for the first time since 2022. Prices had soared through this mark earlier in the week, but retraced gains down before the close. Brent Crude continues to find support from the ongoing closure of the Strait of Hormuz.  

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Latest Price:
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                            BID                      OFFER

Sum-26:          £94.2                   £95.95

Win-26:            £92                       £97

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Latest Gas & Power Annual Chart:
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