Nonetheless, prices can only fall so far, with the geopolitical quagmire in the Middle East keeping volatility elevated.
Further to Tuesday’s Iranian strike against US military assets across the Gulf, market participants continue to price in risk-premium across the front 3-Seasons (Winter-26/Summer-27/Winter-27).
Whilst there have been no further reports today of Iranian disruption to LNG transit through the Strait of Hormuz, successful daily crossings are down to single digits versus 130 or so each day prior to 28th Feb.
As such, prices remain high and sensitive to any minor disruption that could further deteriorate global supply security.
Frustratingly, other than the impacts of Trump’s war of choice in the Middle East, market fundamentals remain constructive and bearish – Norwegian flows are stable despite the summer maintenance season, and renewables outputs are solid and constant.
And yet, given the prolonged closure of the Strait of Hormuz, and incipient problems in the Red Sea and the Suez Canal, European gas storage fullness remains historically low for the time of year – inventories are now at 55% versus the 8-year average of 73% (please see chart below).
Looking forward, for clients with Winter-26 open volumes, we’ll look to advise on potential intraday dips and hedging opportunities over the coming days/weeks.
Monthly Day-Ahead Averages for July so far remain elevated at 129 p/therm (or 4.42 p/kwh exc. non-gas) following a fortnight of high daily numbers ranging between 124p/therm and 152p/therm.
ELECTRICITY & CARBON
The front 5-Seasons are down on the week, but still up versus 1-month/3-months/6-months ago – please see chart below.
Today’s UK electricity generation mix is bearish in nature due to strong renewables outputs – specifically, renewables are contributing 48%, thermal at 11% (gas and coal) and low carbon at 22% (nuclear and imports).
On the Carbon side of things, mid-price Dec-26 UKA delivery sits at at £59.43/tn (and the spot is at mid 58s).
Last week saw increases in UKAs in-line with gas prices, however it looks as though carbon traders have come to their senses this week, as industrial demand destruction caused by prohibitively high gas prices will inevitably lead to weaker carbon values in the mid-term.
For clients with Winter-26 open electricity volumes, we’ll look to advise on potential intraday dips and hedging opportunities over the coming days/weeks.
UK electricity Monthly Day-Ahead Averages for July so far are at £107/mwh (or 10.7 p/kwh exc. non-energy).
