On its penultimate day, the July contract for the NBP settled 3.54p per therm down at 79.14p, the lowest settlement for July since early May

Gas Market

The truce between Israel and Iran held up on Thursday and appeared to have restored some stability to the energy markets. While risk remains, the NBP futures market switched focus back to low demand and increasing levels of gas in European storage.  The front months opened around 3.00p per therm lower and while losses were pared back a touch through the morning, the decline resumed later, and the July contract settled 3.54p down at 79.14p on its penultimate day as front month for ICE.  The afternoon decline was attributed to reports that a German gas storage facility had failed to auction storage space for the coming winter.  Strong wind generation is forecast to keep gas demand subdued over the weekend which added to the downside on the prompt. The Spot settled 7.20p lower while the Day ahead posted a 4.40p loss yesterday.  

Power Market

The decline on the NBP curve pressured GB baseload futures on Thursday as near months posted losses of around £3.30/MWh. A little further out the baseload curve, the Winter contract shed £2.55/MWh while the Summer of next year was down £1.95/MWh. The declines were extended amid carbon prices also yielding premium on the day as contracts approached expiry.  EUAs for Dec-2025 closed €0.86 per tonne down at €70.41. Forecasts for strong wind and solar generation pressured the prompt as baseload for the Day ahead fell by £12.38/MWh or 17.1%.  Wind generation has averaged 10.9GW for the past week and is expected to top 11.0GW on Friday while solar should deliver over 3.5GW.  

Oil Market

The crude oil markets settled flat on Thursday with a return to fundamentals as the truce between Israel and Iran held for another day.  Crude oil prices have returned to the levels seen two weeks ago before Israel launched missiles on Iran and escalated the conflict in the region. Brent is down $11.12 a barrel for the last five days and looks set to post its largest weekly loss in two years. Dollar weakness prevented losses yesterday while the latest inventory report from the U.S. pointed to a recovery in demand stateside.  U.S. crude oil storage supplies fell by 5.8m barrels last week leaving reserves at 415.1m barrels. The onset of the summer driving season saw gasoline reserves fall too, with the Energy Information Administration reporting a drop of 2.1m barrels.  

Markets this morning

NBP futures have opened lower and continued to ease this morning. The front month on its final day of trading is down 2.17p per therm at 76.97p. The remaining months of the summer are also down by around 2.00p so far while the Winter contract with less activity is down 1.25p. Gas demand for today has been pitched at 137mcm and the National Grid are showing a modest surplus which should see prompt prices open lower. There have been no trades agreed for the Spot or Day ahead as yet. In the crude oil markets, a weak dollar continues to prop up prices while the threats of disruption to supplies have receded as the truce continues in the Middle East. Brent for August delivery last exchanged at $68.31, up 58 cents a barrel.