Gas Market
British wholesale gas prices fell on Friday afternoon after reports emerged that Russia would send a delegation to Istanbul on Monday for a second round of peace talks with Ukraine. The front-month NBP contract shed 3.54p to 79.62p/therm, returning to levels seen prior to the recent Norwegian maintenance disruptions. However, gas prices rebounded on Monday, with near-curve contracts rising by an average of 1.87p/therm, as the talks failed to yield progress and both sides launched major air strikes, heightening geopolitical tensions. Adding to market pressure, a report on Monday revealed U.S. LNG exports fell to 8.9 million metric tons in May, down from April’s record 9.3 million, due to outages and maintenance at the country’s largest export terminal. Notably, 68% of these exports were directed to Europe which should help in refilling European storage which currently stands at 48.86% full compared with 70.12% this time last year.
Power Market
GB baseload futures mirrored NBP price movements across Friday and Monday, with contracts dipping £2.95 on Friday before rebounding due to heightened geopolitical tensions in Ukraine. The front-month recovered £1.85 on Monday to settle at £74.25/MWh. On the UK power prompt, the Day-Ahead price dropped by 61.15% to £27.00/MWh on Monday, driven by forecasts of strong wind generation for the remainder of the week.
European carbon prices made early gains on Monday, following natural gas, before falling back as prices remain in the same range they have occupied for the last three weeks. The Dec-25 EUA increased 1.25% to €71.27/tonne.
Oil Market
Oil prices fell on Friday, marking a second consecutive weekly loss, as markets weighed the possibility of a larger-than-expected OPEC+ output hike in July. The new front-month Brent July contract slipped by $1.37 to $62.78 per barrel. However, this loss was reversed on Monday, with the contract climbing nearly 3%, or $1.85, to $64.63/bbl. The rebound was driven by supply concerns after OPEC+ opted not to accelerate its planned output increase, sticking to its original decision to raise production by 411,000 barrels per day. Additional support came from ongoing wildfires in Alberta, Canada’s key oil-producing province, which have disrupted around 7% of the country’s total crude output. Oil prices were further buoyed by a weaker U.S. dollar, which slipped following fresh tariff threats from Trump on steel and aluminium. A weaker dollar makes dollar-denominated commodities like oil more affordable for holders of other currencies.
Markets this morning
Near-curve NBP gas prices are up by an average of 0.80p/therm this morning, supported by the lack of progress in peace talks between Russia and Ukraine. Prompt contracts have yet to trade, but gas-for-power demand remains low due to strong renewable generation forecasts for the remainder of the week. Oil prices have edged higher, driven by escalating geopolitical tensions as Russia and Ukraine intensify the conflict and Iran is expected to reject a U.S. nuclear deal proposal that would be key to easing sanctions on the major oil producer. Brent crude Aug 25 last traded at $64.72/bbl, up 9c.
03 June 2025
