The NBP curve traded sideways on Friday, with the market showing uncertainty around the failed nuclear talks between the U.S. and Iran.

Gas Market

The NBP curve traded sideways on Friday, with the market showing uncertainty around nuclear talks between the U.S. and Iran. A robust LNG supply outlook continued to provide a level of supply comfort amid declining storage levels, geopolitical unease and supply disruption concerns. The front month contract increased by just 0.08p per day to close out the week at 78.57p per therm. Further out, the Winter 26 contract shed 0.22p day-on-day to settle at 80.66p per therm. Meanwhile, the prompt market was supported by conflicting weather forecasts, with above normal temperatures expected for early this week set to give way to severe cold conditions later in the week. The Day ahead contract posted a 1.05p gain to settle at 78.45p per therm, while the Working days next week contract increased by 3.10p to settle at 77.60p per therm.

Power Market

The GB Baseload prompt market traded sideways on Friday despite some minor upside coming from curve gains and forecasts for lower wind production levels. The Day ahead contract closed flat against its previous settlement of £73.58/MWh. Meanwhile on the curve, contracts ticked up in line with UK carbon price gains. The front month contract increased by £0.90/MWh day-on-day to close at £74.25/MWh, while the Summer 26 contract gained £0.30/MWh to close the week at £69.85/MWh. European carbon markets fell on Friday afternoon amid growing political momentum aimed at pushing EUA prices lowers. The Dec 25 EUA contract fell by 1.5% day-on-day, or €1.04, to settle at €68.54 a tonne. In contrast, UK Allowances edged up, with the Dec 25 contract posting a day-on-day gain of £0.81 a tonne.

Oil Market

Crude oil prices were supported on Friday as the market braced for supply disruptions as nuclear talks between the United States and Iran failed to reach a breakthrough. The two sides agreed to extend indirect negotiations into this week, although tensions were palpable as uncertainty over whether or not Tehran and Washington could reach an agreement lingered. Discussions apparently stalled over U.S. insistence on zero enrichment of uranium by Iran. The geopolitical and supply risk pushed the front month Brent contract to its highest close in 7 months to settle at $72.48, a day-on-day increase of $1.73. The West Texas Intermediate (WTI) contract for April delivery increased by $1.81 to close at $67.02 a barrel, a gain of 0.81% week-on-week.

Markets this morning

NBP gas and crude oil markets have opened sharply higher this morning, driven by the escalation of conflict in the Middle East over the weekend. Reports suggest that Iran is currently in control of the Strait of Hormuz and shipping through the waterway has mostly halted. Supply disruption fears have grown considerably as a result, given that around 20% of global LNG and oil trade passes through the strait each year. The front month NBP contract last went through at 98.76p per therm, a gain of 20.78p on Friday’s close. The front month Brent contract last went through at $78.57 a barrel, representing a gain of 8.6% on its previous settlement.