Gas Market
NBP prices trimmed some of Wednesday’s losses on Thursday, with the front-month contract settling up 2.63p at 106.30p/therm and Winter ’26 adding 3.12p to 107.01p/therm. Markets remain focused on Middle East developments, with Iranian negotiators reported to have scaled back hopes for a comprehensive U.S.-Iran deal, instead pursuing a temporary memorandum to prevent a return to conflict. Clarity on a potential reopening of the Strait of Hormuz continues to be a key watch point for direction. On the supply side, maintenance at Norway’s Troll gas field and the Kollsnes receiving terminal cut approximately 10mcm/d of flows through the Langeled pipeline, weakening the UK balance. Prompt contracts pushed higher session on session despite bearish weather forecasts, with flows via Langeled expected to fall further early next week as maintenance continues.
Power Market
Near-curve GB Baseload contracts moved higher on Thursday, tracking gains at the NBP gas hub. Win-26 through Win-’27 contracts drew support from strength in both gas and carbon markets, with Win-26 settling £3.35 higher at £92.60/MWh. From Sum-28 onwards, however, the picture turned bearish following the government’s Carbon Price Support (CPS) announcement, which weighed on UK power prices across the longer-dated curve. Sum-28 declined £2.63 to close at £59.88/MWh.
Both UK and European allowances strengthened sharply after the UK government confirmed it would discontinue the £18/t Carbon Price Support surcharge on fuel combustion from April 2028. Traders interpreted the move as a signal of closer regulatory alignment between the UK and EU emissions trading systems, triggering a 7.5% surge in UKA prices and lifting Dec-26 EUAs to nine-week highs. The Dec-26 EUA closed at €74.99/t, up 1.13% on the day, while Dec-26 UKAs settled at £50.44/t.
Oil Market
Front-month Brent crude climbed $4.46, or 4.7%, to settle at $99.39/bbl on Thursday as markets grew sceptical that upcoming U.S.-Iran peace talks would meaningfully resolve Middle Eastern supply disruptions. Iranian sources indicated that negotiators have scaled back ambitions for a comprehensive deal, instead pursuing a temporary memorandum aimed at preventing a return to conflict. A contradictory statement from President Trump claimed the U.S. is “very close” to a deal, though markets largely shrugged off the remarks with oil benchmarks barely reacting to his remarks. Underlying supply fundamentals added further upward pressure. U.S. crude inventories fell by 913,000 barrels last week, well below analyst expectations of a 154,000-barrel build, while ongoing disruptions continue to strain global supplies, particularly jet fuel stocks across parts of Asia and Africa.
Markets this morning
UK wholesale gas prices are trading lower Friday, with the NBP front-month last down 1.8p at 104.5p/therm, as a 10-day Lebanon-Israel ceasefire and renewed hopes for U.S.-Iran peace talks ease geopolitical risk premiums. Despite the softer tone, supply-side tightness remains a concern, with Troll field capacity set to fall to just 30mcm/d of its 126mcm/d potential by Monday, potentially pushing Langeled flows as low as 13mcm/d. Brent crude is similarly under pressure, shedding $2.18 in early trading as President Trump indicated the U.S. and Iran may meet for talks this weekend, reinforcing optimism that the broader Middle East conflict could be approaching a resolution. Carbon EUAs have posted further gains with the Dec-26 contract posting a €2.25/tonne increase.
