Gas Market
NBP gas prices traded at a modest discount to Monday’s close for most of Tuesday’s session, with early pressure stemming from forecasts for milder weather. The day-ahead contract opened softer, and weakness on the prompt filtered along the curve. The front-month March-26 contract began at 76.72p/th and remained in negative territory for much of the day. A similar pattern was seen in the Summer-26 contract, which opened at 74.32p/th and moved within a relatively narrow range through the afternoon. Sentiment shifted late in the session following reports that Iran was willing to pursue further discussions with the United States over its nuclear programme. The headlines eased concerns over potential disruption to LNG flows via the Strait of Hormuz, removing some geopolitical premium from prices. March subsequently fell to an intraday low of 73.28p/th before settling at 74.47p/th, while the Summer contract dipped to 72.5p/th and closed at 73.12p/th.
Power Market
GB baseload power contracts declined on Tuesday, tracking both the NBP gas and UKA carbon markets. Prices have faced sustained pressure in recent weeks as UKA values declined through February, removing a key source of support for forward power. The Dec-26 UKA contract has fallen 21% since 9 February, sliding from £57.79/tonne to £45.83, mirroring losses in the corresponding EUA market, as the UK continues to explore a potential linkage between the two carbon schemes.
The Dec-26 EUA contract fell by €0.60 to settle at €70.91/tonne, as sustained selling pressure continued to weigh on the market. Following recent comments from the EU regarding potential amendments to the ETS, speculative positions have declined by around 45%, with prices falling by 23% in tandem.
Oil Market
The Brent crude front month fell by 1% on Tuesday to settle at $70.77 per barrel, while WTI closed at $65.63/bbl, as easing geopolitical tensions weighed on prices. Comments from Iran indicating readiness to advance nuclear talks with the United States helped cool fears of an imminent supply disruption in the Middle East, trimming some of the risk premium that had supported crude in recent weeks. Although U.S. military deployments in the region remain elevated, the prospect of diplomatic progress reduced immediate upside pressure. Analysts note that prices still embed a modest geopolitical premium with Iran placed as the third largest oil producer in the OPEC+ group. However, with no further escalation in the country over recent days, the market appears adequately supplied in the near term. Additional headwinds came from a sizeable build in U.S. crude inventories ahead of official data from the Energy Information Administration, reinforcing a softer tone across the market.
Markets This Morning
NBP gas prices have opened on a par with Tuesday’s settlement and have traded in a narrow range thus far. The front-month contract, trading in its penultimate session, is holding firm at 74.53p/th, while the Summer-26 contract is marginally higher at 73.60p/th as the market continues to monitor events in the Middle East. Similarly, oil prices are holding firm as the market weighs the risk of military action by the U.S. in Iran and the impact that could have on oil supplies from the region. Carbon EUAs have moved sharply higher in initial trading, with the Dec-26 contract last trading at €72.59/tonne.
