Gas Market
British wholesale gas prices rebounded on Thursday, driven by continued concerns over prolonged energy supply disruption after Iran signalled it had no intention of holding talks to wind down the conflict. The move came despite contradictory messaging from Washington: U.S. President Trump claimed Iran was desperate to reach a deal, while Iranian Foreign Minister Araqchi said his country was reviewing the U.S. proposal but was not currently engaged in wind-down negotiations. The NBP Summer-26 contract rose 6.01p to settle at 137.77p/therm as vessel traffic through the crucial Strait of Hormuz remained blocked. Prompt prices also rose, with the day-ahead contract gaining 5.25p to 135.80p/therm despite fundamentals pointing in the opposite direction. The UK balance softened on the day ahead, with warmer temperatures pushing LDZ demand down to 151mcm/d and Norwegian imports rising. The geopolitical premium overrode these supply signals, keeping prices elevated.
Power Market
GB baseload contracts traded higher on Thursday, tracking bullish moves on the NBP gas hub amid ongoing Middle East geopolitical tensions. The Summer-26 contract rose 3.6% to £103.13/MWh, while the day-ahead contract rose 14.65% to £113.50/MWh despite a softer fundamental picture, with the geopolitical risk premium continuing to support prices.
European carbon prices shrugged off Wednesday’s headline-driven dip and resumed their recent climb on Thursday, albeit in relatively thin trading. The Dec-26 EUA settled 1.3% higher at €71.65/tonne. Carbon remains confined to a narrow range, reflecting broader hesitation influenced by global conflict risks and uncertainty around pending European Commission details on MSR and benchmark reforms.
Oil Market
Crude Oil futures rebounded on Thursday, recouping losses from the prior session as hopes for a swift end to the Middle East conflict faded. Front month Brent rose $5.79, or 5.7%, to settle at $108.01 per barrel as geopolitical tensions continued to drive sentiment amid conflicting Iran-US signals over peace talks. U.S. Special Envoy Steve Witkoff confirmed Washington had sent a 15-point action list to Iran as a basis for negotiations, though Iranian Foreign Minister Araqchi said Tehran was still reviewing the proposal and that no talks on winding down the war were underway. Supply disruptions added further upward pressure. At least 40% of Russia’s oil export capacity is now offline following Ukrainian drone attacks and the seizure of tankers. Among the facilities affected, Russia’s Kirishinefteorgsintez refinery, one of the country’s largest, halted processing on Thursday after being struck by drones.
This Morning
Gas and oil markets have opened higher, with geopolitical uncertainty remaining elevated despite President Trump postponing planned strikes on Iranian energy infrastructure by a further 10 days, citing progress in talks. Iran has yet to formally respond. Global LNG supply is tightening further after a tropical cyclone temporarily halted production at the two largest Australian LNG facilities, adding pressure to an already constrained supply picture. Australia became the world’s second-largest LNG exporter after Qatar shut down production this month. NBP Summer-26 last traded up 0.62p at 138.39p/therm, while front month Brent is up $1.79/bbl at $109.80.
Yesterday in Summary
Thursday’s energy markets were broadly higher, driven by fading hopes for a swift resolution to the Middle East conflict. NBP gas prices led the move, with Summer-26 rising 6.01p to 137.77p/therm as contradictory messaging from the U.S. and Iran around peace negotiations heightened concerns of a protracted disruption to energy flows. GB baseload tracked gas markets higher while Dec-26 EUAs recovered Wednesday’s dip to settle 1.3% higher at €71.65/tonne. Brent crude rose 5.7% to $108.01/bbl as U.S.-Iran peace talk signals remained contradictory, with Russian supply disruptions adding further upward pressure after Ukrainian drone strikes took 40% of export capacity offline
