Gas Market
British wholesale NBP gas prices moved sharply lower on Tuesday, as comments from Trump triggered a cautious sell-off across the curve. His suggestion that the U.S. could disengage from Iran regardless of a deal to reopen the Strait of Hormuz was interpreted as supportive for LNG flows, while traders also pointed to earlier Iranian statements indicating the waterway remains open to most traffic, raising the prospect of cargoes resuming transit over the coming weeks. As a result, the new front-month May-26 contract fell by 10.36p/th to 128.10p, with the Winter-26 contract also declining by over 10p to settle at 129.71p/th. The move reflects a sharp reduction in the geopolitical risk premium, with NBP prices now back near levels seen prior to the Iranian attack on the world’s largest LNG production facility Ras Laffan, when the May-26 contract last settled around 129.91p/th.
Power Market
GB baseload power contracts moved lower, tracking losses in the wholesale NBP gas market. The unwinding of the geopolitical risk premium saw the Summer-26 power contract expire at £97.30/MWh, down £4.83 on the day. Limiting losses on the power market, the UK carbon market strengthened, with the UKA Dec-26 price rising by £3.21/tonne to settle at £41.58/tonne. Day-ahead baseload contracts were broadly unchanged, as wind forecasts remained stable day on day.
Carbon prices have held fairly steady in recent sessions, with little change on Tuesday, as the market awaits further announcements on the Market Stability Reserve (MSR) and Free Allocations. The Dec-26 contract fell just €0.15, settling at €72.30/tonne.
Oil Market
Brent crude prices weakened on Tuesday, with the June contract settling at $103.97/bbl as market focus shifted to forward contracts following comments from Iran suggesting a willingness to end the conflict under certain conditions. The expiring May-26 contract closed at $118.35/bbl after a volatile session, though activity was subdued as liquidity rolled into June. While the front month May-26 contract capped a strong run higher over March, rising by 64%, attention has now moved further along the curve, where prices came under pressure as traders pared back some of the geopolitical risk premium. The reaction to the Iran headlines highlighted the market’s sensitivity to any signs of de-escalation, with forward contracts reflecting a more cautious tone on expectations that supply constraints could ease if tensions in the region begin to unwind. This comes as geopolitical risk continues to be weighed against physical supply, with the March conflict contributing to a sharp drop in OPEC output to its lowest level since the pandemic.
Markets this morning
Losses across the wider energy complex on Tuesday have extended into this morning, as further comments from President Trump overnight suggesting the war could end within the next two to three weeks continue to weigh on prices. The front-month May-26 gas contract has fallen a further 4.72p/th in early trading, leaving it more than 15p below Monday’s close. Activity further along the curve remains thin, with only minimal trading on the Q3-26 and Winter-26 contracts. Oil contracts are also drifting lower, though at a slower pace, with the Jun-26 front-month Brent contract down just 0.7% from Tuesday’s settlement. Carbon is little changed once again as the market awaits today’s EU ETS Stakeholder meeting.
Gas prices declined sharply as the geopolitical risk premium linked to the Middle East conflict eased following comments from U.S. President Trump
Oil prices fell as easing geopolitical tensions reduced risk premium, with focus shifting to the more actively traded Jun-26 contract
British wholesale gas prices declined sharply on Tuesday as Trump’s comments on a potential U.S. disengagement from Iran eased the geopolitical risk premium, with the NBP May-26 contract down 10.36p/th at 128.10p and Winter-26 falling to 129.71p/th. Brent crude softened, with the June-26 contract settling at $103.97/bbl, as Iran’s comments on a possible de-escalation provided further downward pressure on forward oil contracts. Carbon markets remained steady, the Dec-26 EUA edging down €0.15 to €72.30/tonne as the market awaits news on the MSR and Free Allocations. GB baseload power prices also tracked lower, pressured by losses on the NBP gas market.
