Tuesday 28th July

Prices fall as the US pause strikes on Iran

Gas and power

Prices fell heavily on Monday to touch a one-week low. News that the US had paused strikes on Iran was the key driver, with market participants hoping that the pause could lead to further diplomatic talks. The fall in prices came despite later reports that Iran-backed groups were continuing to launch drone attacks on neighbouring countries and Iranian media claiming that ships were still being turned back from the Strait of Hormuz. Weather forecasts remained broadly stable, with above-normal seasonal conditions expected over the next two weeks and wind generation slightly below normal levels.

Adjacent markets

Oil prices traded lower during yesterday’s session, falling to their lowest levels in around a week, as the US and Iran appeared to pause military strikes over the weekend and reports suggested diplomatic progress had been made in bringing the two sides back to the negotiating table. The developments raised optimism around a potential de-escalation of the conflict and a resumption of shipping through the Strait of Hormuz. Improved sentiment also provided support to equity markets, with global indices generally moving higher during the session.

Closing prices