Energy Prices Fall as Trump Delays Iran Energy Infrastructure Strikev

Market Update:

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• Market prices dropped yesterday morning, following President Trumps's postponement to attack Iran's power grid because of what he described as productive talks with unidentified Iranian officials.
• As a result, he said he was postponing for five days a plan to hit Iran's energy grid. This sent share prices higher and oil/energy prices sharply lower.
• Iran denied that it had engaged in negotiations with the U.S. It has been said that no direct negotiations were taking place, however, Egypt, Pakistan and Gulf states were relaying messages, with talks could be held in Islamabad this week.
• The ongoing picture remains unclear & unstable, with continued war operations.

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NATURAL GAS:

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European gas markets have opened slightly lower after a strong sell off yesterday off the back of Trump’s latest social media post where he announced a delay to his 48 hour threat of attacks on Iranian energy infrastructure, citing progress in talks around bringing an end to the hostilities. The front month NBP contract is pricing at 143.70 p/th at time of writing, down just 0.70 p/th day on day. The equivalent TTF contract is pricing at 56.50 €/MWh, down 0.65 €/MWh day on day.
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The fundamentals remain bearish as milder weather persists today with the UK system 18mcm long at open with total demand at 196mcm, 53mcm below seasonal normal. Withdrawals from storage have slowed with demand easing through the back of half of Q1. S26 on the TTF remains at a premium to the W26 contract, disincentivising storage refilling, although the spreads have narrowed recently.
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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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