NBP gas prices moved sideways on Tuesday following Monday’s decline and change in the risk profile

Gas Market

Gas prices moved sideways on Tuesday following Monday’s decline. Opening in negative territory gas contracts appeared as if they would continue to fall following the change in the risk profile. With Isreal’s retaliation on Iran over the weekend not targeting energy infrastructure the risk premium that had built up in previous weeks looked as if it was beginning to fall out. However, prices soon began to increase amid buying interest and traded for much at the session back in line with prices last week. The Q1-25 contract traded as high as 111.1p/th, only marginally lower than Friday’s close of 111.35p/th. All traded contracts shed some value prior to the settlement, however gas contract as far out as Summer-25 closed marginally higher than Monday’s settlement.

Power Market

GB Baseload tracked the movements on the NBP as the contracts ebbed and flowed from negative to positive territory. The late decline on the NBP had a mixed result on power contracts, with some settling at a discount while near term contracts settled higher than Monday’s close. The baseload day ahead contract moved marginally lower but remains elevated. The prompt market is currently supported by low wind generation and the continued unavailability of two interconnectors between the UK and France. The unavailability of the interconnectors is limiting the import of cheaper French power.

Oil Market

Oil prices continued to decline on Tuesday following Monday’s 6% fall. Brent crude for delivery in December fell by a further 30 cents as the market weighed up the latest events in the Middle East. Following Israel’s attack on Iran that bypassed the country’s energy infrastructure oil prices tumbled on Monday, and comments from the Iranian Foreign Ministry that Iran would “use all available tools” against Israel could not stem the tide as crude oil traded lower. The market instead focussed on the possibility of talks to end the conflict in Lebanon taking place between Israeli officials. As a result, of the positive reports, the Brent front month contract fell to $71.12/bbl at the close, with the equivalent WTI contract settling at $67.21/bbl.

Markets this morning

The decline witnessed on the NBP on Tuesday afternoon has continued into this morning as the risk premium that built up in anticipation of Israel’s retaliation continues to fall out of the market. The front month last traded at 104.75p/th almost 2.50 pence decline from Tuesday’s settlement. The Day ahead contract is also declining taking direction from the near curve and the reduction of Norwegian maintenance. Oil prices have rebounded slightly having hit a 6-week low yesterday, as the market takes stock of the losses over the previous two sessions and weighs a potential ceasefire between Israel and Hezbollah and rising OPEC+ supplies against a drop in US fuel stocks.