Gas Market
UK gas prices had a mixed session yesterday, initially rising before turning negative. The Day-ahead contract remained in positive territory, gaining 0.15p to settle at 85.70p/therm, supported by reduced renewable generation and further maintenance outages at both the Troll field and the Kollsnes processing plant. Across the forward curve, all contracts settled lower. The front-month July contract reached an intra-day high of 85.75p/therm amid concerns that the conflict could escalate. This followed a phone call in which Russian President Putin warned U.S. President Trump of reprisals for recent attacks on Russian airfields. However, it later softened to close down 0.13p at 83.36p/therm. The Winter 2025 contract also declined, falling 0.62p to 94.30p/therm, after reports emerged that Russian gas is being piped from Hungary to Ukraine to support storage replenishment efforts.
Power Market
GB baseload power prices were muted on Wednesday. Along the curve, contracts saw minimal movement from the previous session’s close, with the front-month contract down just £0.05 and the Winter 2025 contract falling £0.47 to £84.70/MWh, broadly tracking trends in the gas market. On the prompt, the Day-ahead price jumped 32.74% to £75.00/MWh, driven by a continued decline in wind generation back to seasonal norms.
EU carbon prices gave up a mid-morning rally to close slightly lower. Early gains were supported by firmer natural gas prices and stronger equities but eventually gave way to late declines on the NBP. The 2025 EUA contract ended the day down €0.13 at €72.70/tonne.
Oil Market Draft
Oil prices fell by more than 1% on Wednesday, weighed down by larger-than-expected builds in U.S. gasoline and diesel inventories, heightening concerns about oversupply amid global trade tensions and cuts to Saudi Arabia’s July prices for Asian crude buyers. Front-month Brent crude settled down 77 cents at $64.86 per barrel. U.S. gasoline stockpiles rose by 5.2 million barrels, significantly exceeding forecasts for a 600,000-barrel increase. Distillate inventories also climbed by 4.2 million barrels, compared to expectations of a 1 million-barrel rise. Meanwhile, a report from Russia’s finance ministry revealed that oil and gas revenues dropped 35% year-on-year in May. With Russia relying on higher oil prices to balance its budget and fund its military operations in Ukraine, the country may resist any further OPEC+ output hikes.
Markets this morning
NBP near-curve contracts are trading up an average of 2.01p/therm this morning, supported by ongoing Norwegian maintenance and forecasts for reduced wind generation. Total Norwegian export nominations have fallen by 35 mcm/day, with heavy maintenance expected to continue until June 17th. Geopolitical tensions are also adding risk premium, as concerns grow following Russian President Putin’s warning to U.S. President Trump that he will have to respond to Ukrainian drone attacks targeting Russia’s nuclear-capable bomber fleet. Meanwhile, Brent crude is steady, up 12 cents at $64.98/bbl.
05 June 2025
