The NBP gas market continued its downward trend on Tuesday

Gas Market 

The May 2025 gas contract expired yesterday at 76.67 pence per therm—its lowest settlement in over a year. Since February, a series of geopolitical and economic developments have significantly weakened the gas market. The contract had peaked at 138.51p/th on February 11 but has since lost 45% over 77 days. A major factor in this decline has been President Trump’s involvement in global affairs, particularly his interventions in the Russia-Ukraine conflict and the imposition—then partial suspension—of broad global trade tariffs. Yesterday’s drop continues the recent bearish trend, driven by renewed optimism for a peace agreement in the Russia-Ukraine war and expectations of demand destruction from the ongoing tariff uncertainty.  

Power Market

GB baseload power prices for the remainder of the summer declined in line with falling gas prices, with the June 2025 contract losing £1.05/MWh, settling at £70.75. In contrast, the Winter 2025 contract found support from rising UKA prices, offsetting weakness in the NBP gas market and resulting in largely sideways movement. Notably, the front-month baseload contract is currently priced above the peak contract covering the 5pm to 7pm window—an unusual occurrence. This is due to forecasted above-average solar generation, which is putting downward pressure on peak prices by displacing more expensive thermal generation.  

Oil Market

Crude oil prices continued to decline amid ongoing concerns over the U.S. wide-ranging tariffs, particularly the trade war with China. The Brent front month, June, fell by $1.61 per barrel in trading on Tuesday, settling at $64.25. Negotiations surrounding the proposed tariffs have made little headway, eroding confidence in global oil demand. Bearish sentiment was further reinforced by the anticipated increase in oil output by OPEC+. The group announced last month that it planned to raise production starting in May, and despite internal disagreements last week, no further statements have been made—leading the market to assume the increase will go ahead as planned.

Markets this morning

Gas prices are mostly flat compared to Tuesday’s closing levels at this stage of the trading day. The new front-month contract, June 2025, has traded within a narrow range, with the most recent trade confirmed at 76.94 pence per therm. On the prompt, prices remain suppressed due to above-seasonal temperatures, which continue to reduce domestic heating demand. Meanwhile, crude oil prices are extending their decline this morning, pressured by President Trump’s tariff policies and the anticipated increase in OPEC+ production. The front-month contract last traded at $63.55 per barrel, down $10.96, or 15%, since the start of April—on track for its largest monthly loss in three and a half years.