NBP near months gained over 5% on Tuesday as hopes of a peace deal between Russia and Ukraine faded.

Gas Market

NBP near months gained over 5% on Tuesday as hopes of a peace deal between Russia and Ukraine faded. Despite a two-hour phone call between Trump and Putin late on Monday which ended with the U.S. President calling for an immediate and unconditional 30-day ceasefire and a start to truce talks, Ukraine has subsequently accused Russia of “trying to buy time” to continue its war. The front month contract gained 4.80p to settle at 89.09p per therm while the Winter 25 contract posted a 3.60p gain to close at 97.83p per therm. Prompt prices across the NBP and continental hubs were supported by the full shutdown of the Troll and Kollsnes facilities for maintenance as well as reduced Langeled flows. The Day ahead contract increased by 6.45p day-on-day to close out the session at 90.45p per therm.

Power Market

In contrast to the gains made across the curve, the GB Baseload prompt market declined on Tuesday. An upward revision to temperatures as well as wind generation levels weighed on the Day ahead contract, which fell by £4.11/MWh day-on-day to finish at £82.64/MWh. Meanwhile, increases across the NBP curve supported GB Baseload futures, with the front month contract posting a £4.22/MWh increase to close at £80.48/MWh. Tuesdays’ gains across European gas markets filtered into carbon prices, with the EUA Spot contract finishing at its highest close in 9 weeks to settle at €72.39 a tonne. UK Allowances also firmed, with the December 25 contract increasing by £2.67 day-on-day to close at £55.00 a tonne.

Oil Market

Crude oil markets traded sideways on Tuesday amid a volatile geopolitical landscape. With a potential fifth round of talks between the U.S. and Iran on the cards, the prospect of additional Iranian oil supply coming to the global market remained a distinct possibility, further playing into oversupply concerns. Furthermore, while hopes of a ceasefire between Russia and Ukraine have faded, the market was sceptical as to whether or not potential major sanctions on Russia from the U.K. and Europe would have a significant impact on global oil supplies. The front month Brent contract fell by just 16 cents day-on-day to close out the session at $65.38 a barrel.

Markets this morning

Yesterday’s gains have continued into this morning with the front month contract last going through at a 1.34p per therm premium to Tuesday’s close. Growing geopolitical tensions and reports of tougher sanctions on Russia by the U.K. and the E.U. continue to provide support. The scheduled maintenance at Troll and Kollsnes is expected to end this week which should mitigate potential upside across the prompt. Although Norwegian flows into the U.K. are expected to remain low today, the GB system is currently oversupplied. Oil prices are this morning supported by reports that Israel could be preparing to strike Iranian nuclear facilities, raising fears of a supply disruption in the area. Front month Brent last went through at $66.16 a barrel, up 78 cents day-on-day.