Gas Market
The peace talks between the U.S. and Iran broke down over the weekend and the U.S. President posted that his next move would be to impose a naval blockade on Iranian ports if the Strait of Hormuz is not opened up and set a deadline of 3.00pm on Monday. It was a disappointing ending to the intense talks mediated by Pakistan with no date set for a further discourse and the U.S. Vice President, JD Vance, returned empty handed to Washington. With crude oil prices rising above the $100 dollar mark again, the gas markets opened higher with uncertainty driving risk premium into the near NBP curve. The front month having opened at 126.69p per therm traded around 10-12.00p above Friday’s close for most of the morning before easing a touch through the afternoon when another of Trump’s deadlines passed. At the close, May, was 7.10p higher at 116.79p, while the remaining months of the summer were an average of 5.70p up at the end of the day.
Power Market
UK baseload power futures recovered Friday’s losses yesterday on the back of rising gas prices following increased geopolitical risks after the breakdown of peace talks in Islamabad at the weekend. The May contract added £3.50/MWh to settle at £91.25/MWh while the Winter contract was assessed £2.38/MWh higher at $93.88/MWh. Baseload for the Day ahead was flat yesterday as wind generation is not expected to pick up until later in the week.
Carbon EUAs eased marginally on Monday after news that the U.S. would blockade Iranian ports if the Strait of Hormuz was not freed up. The Dec-26 and Dec-27 contract declined by 23 and 13 cent per tonne respectively. UKAs moved in the opposing direction with contracts adding 1.4% or £0.60/ tonne.
Oil Market
Markets have responded cautiously to the U.S. blockade of Iranian ports and further online posts from Donald Trump with the potential risk of a resulting shortage in global oil supply. The blockade is intended to stop all maritime traffic from entering and exiting Iranian ports, but the U.S. have stated that it will not impede vessels transiting the strait to and from other nations. Having trade to a high of $103.37 a barrel, the front month Brent contract posted a measured increase of $4.16 per barrel from last week’s close, settling at $99.3.6 a barrel. As a result of the disruption, OPEC have lowered its forecast for world oil demand in the second quarter of the yar by 500,000 barrels per day. The timeline on any increase of traffic through the Strait of Hormuz remains unclear while peace talks remain suspended. West Texas Intermediate (WTI) recorded a more modest gain of $2.51 a barrel to settle at $99.08
Markets this morning
After the peace talks in Islamabad ended without agreement at the weekend, the U.S. President posted that they would blockade Iranian ports if the Strait of Hormuz is not opened. Having rallied early on Monday morning, crude oil prices eased through the afternoon and the front month for the global benchmark settled at $99.36 posting a gain of $4.16 a barrel day-on-day. In the UK gas markets, risk premium inflated the near curve, with May settling 7.10p per therm higher at 116.79p having opened at 126.69p. The Winter-26 contract added 4.83p to close at 114.89p.
