Gas Market
NBP gas prices extended losses on Tuesday, building on Monday’s sharp sell-off in subdued early trading. Liquidity was limited at the open, keeping moves relatively contained, with the front-month March-26 contract slipping by around 2p/th through the morning. Pressure intensified later in the session as a sustained decline in carbon markets reinforced a softer tone across European gas, pushing contracts to their intraday lows in the afternoon. March ultimately settled at 74.45p/th after briefly touching 74.02p/th. Further out the curve, weakness persisted, with Summer-26 falling 2.85p to 71.27p/th, holding just above the 71.00p level and broadly back in line with prices seen a week earlier following the previous Monday’s heavy drop. The front Winter contract also eased, closing at 76.39p/th, around 8p above its recent four-year low. On the prompt, a bearish curve and milder weather forecasts weighed on the Day-Ahead contract, which settled at 77.15p/th
Power Market
The sell-off on the NBP gas and carbon markets weighed on GB baseload power contracts. The Dec-26 UKA fell 10%, while gas prices dropped around 5%. As a result, Power prices fell across the board, with the front month seeing the largest decline. The March contract lost £5.05/MWh, settling at £75.13/MWh. In addition to gas and carbon, prompt baseload contracts were pressured by high wind generation forecast for the coming days, which also weighed on the front month.
The EUA carbon market tumbled on Tuesday afternoon as reports of possible adjustments to free allocation, speculation over potential changes to EUA availability, and developments ahead of the upcoming Market Stability Reserve review triggered a sharp sell-off. The Dec-26 contract fell €2.62/tonne by the close, having touched losses of over €3 earlier in the session.
Oil Market
Front-month Brent crude settled at $68.80/bbl on Tuesday, down modestly on the day due to a lack of clear price drivers. Traders remained cautious, awaiting clearer signals from U.S.-Iran diplomacy, developments in efforts to end the war in Ukraine, and upcoming U.S. inventory and economic data. Rhetoric between Washington and Tehran offered mixed cues, with both sides indicating room for further nuclear discussions even as reports suggested the U.S. is considering tougher enforcement on Iranian crude exports. However, without concrete action affecting flows through the Strait of Hormuz, participants were hesitant to build in a significant risk premium, even considering Monday’s warning to U.S. tankers in the area. At the same time, attention turned to potential shifts in Russian exports amid ongoing negotiations over Ukraine, while forecasts pointed to a gradual recovery in Venezuelan production back to pre-blockade levels by mid-2026.
Markets this morning
Latest forecasts point to a potential drop in UK temperatures this weekend, coupled with slightly lower wind generation than previously expected, supporting gas prices this morning. Prompt contracts are trading 1.80p/th above yesterday’s close, with March-26 up 1.92p at 76.37p/th. LNG flows remain strong despite restricted Milford Haven output, with seven cargoes expected over the next five days. Carbon markets continue to decline following yesterday’s reports of potential EU ETS adjustments. Brent crude is $0.95/bbl higher, as markets watch U.S.-Iran nuclear talks and possible disruption to Iranian oil supplies.
