Gas Market
The gas markets recorded another day of sharp losses on Wednesday following the comments from the U.S. President in which he stated that the war with Iran could be over in two or three weeks. Later in the session, Trump posted that Iran had requested a ceasefire, but this claim was denied by the Iranian Foreign Minister. Trump also hinted that war could conclude without a deal for the reopening of the Strait of Hormuz. The new front month for the NBP settled at a new three-week low having bottomed out at 118.62p per therm early on, almost 10.00p below Tuesday’s close. The May contract finally settled at 120.42p, down 7.68p day-on-day. A little further along the curve, the Winter-26 contract posted a loss of 8.61p to close at 121.10p. Prompt prices tracked the front of the curve lower yesterday and the Day ahead product yielded just over 7.00p.
Power Market
Weakness on the NBP gas curve due to a potential de-escalation of the Iran war weighed on GB baseload futures yesterday. The new front month, May, shed £4.13/MWh to close at £92.88/MWh. Further out the curve, the Winter-26 contract was assessed £4.00/MWh lower at the close and settled at £98.00/MWh. Forecasts for increased wind speeds saw the Day ahead fall by 7.0% or £8.03/MWh on the day.
Carbon prices rose on Wednesday following the European Commission’s announcement that it will only apply small changes to the Market Stability Reserve (MSR). European Allowances moved to a seven-week high with contracts covering Dec-26 and Dec-27 adding over €2.30/tonne.
Oil Market
The posts from Donald Trump gave a steer to the crude oil markets on Wednesday as the June contract from Brent tumbled to $101.16 a barrel. The U.S. President released a post late on Tuesday to say the war with Iran could end within two to three weeks. Later he went on to say that Iran had requested a ceasefire but would only consider this if the Strait of Hormuz is unblocked. The ceasefire request was later dismissed by Iran’s Foreign Minister, however, The President of Iran, Masoud Pezeshkian has called for peace in the past so President Trump may have been referring to that. Trump then set a press release for later in the evening raising expectations of an important announcement. The markets interpreted his post as a potential de-escalation of the war and the stock markets rebounded while crude oil prices posted significant losses. At the close, Brent was down $2.81 a barrel while the U.S. benchmark, West Texas Intermediate eased by $1.26 a barrel.
Markets this morning
Following Donald Trump’s late address to the nation, energy prices have opened higher this morning. The U.S. President stated that their objectives were near completion but then said Iran would be hit hard over the next couple of weeks which was at odds with the expectations of the markets after his posts earlier in the week. NBP futures opened around 10.00p higher with May peaking at 130.89p, however, the gains have been partially pared back and the front month last exchanged at 124.29p per therm which is up 3.87p on last night’s close. Crude oil prices surged by around $7-8 dollars a barrel overnight and the June contract for Brent is up $7.48 at $108.64 a barrel.
