Energy Markets Surge as LNG Facilities Targeted and Oil Hits $116

Market Update:

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• Despite falling prices early on Wednesday, news of attacks on Iran's major gas field, the huge South Pars, lifted prices in the afternoon.
• Overnight, Iranian retaliatory attacks occurred at Qatari gas facilities at Ras Laffan.
• Saudi Arabia said that it had intercepted & destroyed four ballistic missiles launched towards Riyadh and an attempted drone attack on a gas facility in its east.
• Oil prices are now trading around $116/bbl, an increase of some 8-9%.
• Gas prices rocketed upon opening, with Sum-26 up some 34p/T. Now pulled back approx. 11p/T from this earlier increase.
• U.S. President Donald Trump said an angry Israel had "violently lashed out" and attacked Iran's major gas field, a significant escalation in the U.S.-Israeli war, but said Israel would not make further such attacks unless Iran retaliated.

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NATURAL GAS:

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Middle East conflict continues to drive the markets this week. Yesterday saw strikes on Iranian Oil facilities followed by an Iranian promise to retaliate. Yesterday evening Iran struck multiple targets most notably the Ras Laffan Industrial city in Qatar, home to one of the largest LNG facilities in the region. Significant damage has been reported, with some reports claiming the refinery has taken some damage.
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Due to the overnight news, markets have gapped up significantly this morning with the front month Apr-26 NBP contract trading at 173.20p/therm at the time of writing having climbed as high as 175p/therm early morning. The TTF equivalent Apr-26 contract is trading at €68.175/MWh at the time of writing. The front season prices at the time of writing are 169p/therm NBP and €67.505/MWh for TTF.  Prices further along the curve which have seen some resistance to the conflict in the Middle East have also risen this morning.
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Trump has claimed that the US had no knowledge of the planned Israeli strikes on the gas fields however did respond that if Iran were to make further strikes on Qatar that they would ‘blow up’ the South Pars gas field. Trump has also noted that there will be no more strikes from Isreal on the gas fields in Iran.

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ELECTRICITY:
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Power prices have not been immune to the gap upwards in the markets overnight. The front month UK Baseload contract is trading close to £130/MWh this morning with the German Baseload Apr-26 contract at €103.75/MWh. The Sum-26/Win-26 UK baseload power spread is almost flat, at close to £120/MWh for both contracts.

EUA prices have seen a move down this morning following the hike in gas prices trading to close to €63.60 at the time of writing having traded over €90 at the start of the year.

Wind speeds in NW Europe are generally weak over the next few days but expected to prick up quickly into next week adding some good renewable generation to the mix.  

Oil prices have gapped up as well this morning with Brent over $115/barrel at the time of writing following strikes in the Middle East. There are reports of Kuwaiti facilities being damaged by strikes.

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Latest Price:
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Latest Gas & Power Annual Chart:
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