Gas Market
British wholesale NBP gas prices were volatile on Tuesday after Iran rejected a U.S. ceasefire proposal brokered by Pakistan, as Trump’s midnight deadline to reopen the Strait of Hormuz drew near. Strikes intensified throughout the session, hitting road and rail bridges, while reports emerged that Israel had attacked Iran’s South Pars natural gas field and its associated petrochemical complex for a second time. Israel’s Defence Minister confirmed the strike on the Asaluyeh petrochemical plant, stoking fears of prolonged supply disruption. The front-month NBP contract swung between an intra-day low of 123.41p and high of 135.79p/therm before settling up 8.10p at 135p/therm. Day-ahead prices rose 5.53p to 131p/therm. Geopolitical risk drove gains across the forward curve despite a comfortable supply backdrop, with Norwegian flows increasing and wind generation forecast to pick up later in the week.
Power Market
UK baseload near-curve contracts continued to strengthen, tracking gains in global gas markets. The front-month May-26 contract gained £4.25 to settle at £100/MWh, with sustained support from the Iran-driven gas rally. On the prompt, the day-ahead contract surged 44.16% to £111/MWh, lifted by weaker wind forecasts, though generation is expected to recover later in the week. Temperatures across Europe are also expected to stay below seasonal norms in the near term, keeping demand elevated.
European carbon markets held relatively flat as traders awaited the European Commission’s publication of 2026-2030 EU ETS free-allocation benchmarks, due “shortly after Easter.” The Dec-26 EUA contract settled at €71.51, down 0.25% on the day, with volumes muted ahead of the release.
Oil Market
Oil prices ended Tuesday on a split note, with front-month Brent slipping 50 cents to $109.27 a barrel on concerns that elevated energy costs could weigh on growth, while WTI rose 54 cents to $112.95, its highest close since 2022. Typically WTI trades at a discount to Brent, but that has reversed in a market where near-term barrels command a premium. European and Asian refiners are meanwhile paying record prices of near $150 a barrel for some crude grades, far above paper futures, underscoring deepening supply stress. The divergence came as President Trump’s midnight GMT deadline for Iran to reopen the Strait of Hormuz drew near, with Tehran showing little sign of compliance following its attacks on Saudi industrial facilities. Trump threatened sweeping strikes on Iranian bridges and power infrastructure, with Iran warning of retaliation against U.S. Gulf allies. As the deadline approached, explosions were reported on Kharg Island, home to Iran’s primary oil export terminal. The World Bank cautioned the conflict would drag on global growth and lift inflation regardless of its duration.
Markets this morning
European and UK wholesale gas prices fell sharply Wednesday after the U.S. and Iran agreed a two-week ceasefire, with Tehran pledging to pause its Strait of Hormuz blockade and provide safe passage for vessels if attacks against it cease. Trump described Iran’s 10-point proposal as a “workable basis” for negotiations, adding he expected a deal to be finalised within the two-week window. Israel also supported the decision to suspend strikes on Iran for the two-week period. Front-month NBP has plunged 20p to 115p/therm, with Winter-26 falling 20.32p to 114.50p/therm. Brent crude has shed $14.95 to $94.32/bbl. Attention now turns to peace talk progress and LNG cargo flows through the strait as the ceasefire takes hold.
