Financial market issues pressure prices

A rebound in financial markets propelled NBP gas prices higher on Tuesday.

Intraday volatility was observed with key contracts struggling to establish a clear direction amid rapidly evolving global events. Following on from Mondays liquidity sell-off that shook global stock markets and trading hubs, Tuesday brought with it considerable recovery across key indices such as the UK FTSE 100 and the US S&P 500.

The improved economic outlook likely brought with it upward revisions to demand forecasts for fuels such as natural gas and oil and other commodities, contributing to the slight uptick seen on Tuesday.

Further support came from continuing geopolitical tensions in the Middle East. Following the assassination of a top Hamas military leader in the Iranian capital of Tehran, we are yet to see clear retaliatory action from Iran as promised by the country’s leadership in the wake of the event.

This naturally has markets on edge as the world is left in the dark about the true scale and severity of such action – if and when it is conducted. This morning gas prices have opened in softer territory, with the Winter 24 front season contract currently being offered circa 1.5p/therm (0.05p/kWh) below its previous settlement at time of writing.

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Price commentary courtesy of Crown Gas and Power