• The escalation of the Russia/Ukraine conflict continues to push prices up
• Cooler temperatures and poor wind outlook support bullish markets
• Iranian oil unlikely to bridge gap if Russian oil was to be sanctioned

Gas markets continued to rise today (4th March 2022), with Summer-22 as well as April and May contracts breaking the 400p/Therm mark. The ongoing conflict in Ukraine remains the main driver day-to-day, as supply fears persist. Russia attacked the nuclear plant in Ukraine, which would have been catastrophic for the continent, however failed to weigh in on prices as the fire was quickly eradicated.

Adding support to the markets are the cooler temperatures we are likely to see over the coming weeks, along with reduced wind generation as it dropped significantly today, adding less than 4GW to the stack. Norwegian flows remain stable, helping the gas system open up 9 MCM/d oversupplied.

Oil prices rose above $112/Bbl today due to fears of Russian exports being sanctioned. The prospect of Iranian supply coming into the mix is unlikely to offset any bullishness from Russian oil been banned, due to the significant difference in production levels between the two producers.