Gains were largely concentrated at the prompt and near curve of the NBP on Tuesday

Gas Market

Risk premium inflated NBP futures on Tuesday morning though strength faded beyond the front quarter and longer curve contracts settled relatively flat or slightly lower at the close. Gains were largely concentrated at the prompt and near curve as the market balanced rising geopolitical tensions in Iran against forecasts for cooler temperatures for the next two weeks. The February contract climbed to a high of 84.20p before gains were trimmed through the afternoon leaving the front month 3.32p per therm higher for the day at a settlement of 81.87p.  Further along the curve, summer contracts initially added around 1.80p in early trading but reversed sharply, shedding around 2.00p intraday to see Summer-26 finish 0.20p lower day-on-day. On the prompt, fundamentals added to the upside with lower wind output and a short gas system amplifying the early bullish sentiment, driving the Spot and Day ahead contracts up by around 4.00p.    

Power Market

  GB baseload futures tracked movement on the NBP curve for the most part yesterday as the front month held most of the earlier gains.  Continued strength in the carbon markets left some longer contracts higher at the close. The front month ended the session £3.75/MWh higher yesterday while the Summer-26 contract posted a decline of £0.33/MWh. Lower wind forecasts supported the Day ahead which settled 8.5% up. Carbon EUAs climbed for a sixth session yesterday on the back of forecasts for cooler temperatures which prompted early buying. European Allowances increased by an average of 0.4% or €0.41 per tonne while UKAs added 0.9% or £0.63 per tonne.    

Oil Market

 Crude oil prices closed higher for a fourth session on Tuesday as fears of supply disruptions rise after Trump promises help is on the way to protestors in Iran. Geopolitical risk from the protests in Iran coupled with the war in Ukraine and Trump’s desire to have Greenland has eclipsed the potential for increased oil supplies from Venezuela this week. It’s believed that the Iranian government’s response to protestors has led to over 2,000 deaths while thousands more have been detained. President Trump has encouraged Iranians to keep protesting and promised help although he did not make it clear in what form this assistance would take. He also announced tariffs on any country doing business with Iran, again no details were provided on this. Brent closed $1.60 a barrel higher at $65.47 while the U.S. benchmark, WTI, settled at €61.15 up $1.65 a barrel.    

Markets this morning

The return of cooler temperatures along with lower wind generation has increased gas demand to over 310mcm this morning but GB supplies are lagging by 11mcm.  NBP futures opened lower while increased volatility has seen direction switch with latest trades for the near curve running above last night’s close. The February contract has traded in a wide range, between 78.99p and 84.34p per therm with the most recent trade going through at 83.98p. Further along the curve, the Summer-26 contract is 0.62p higher at 66.50p. In the crude oil markets, Brent last exchanged 38 cents up at $65.85 a barrel as Venezuela resumes oil exports.