Gas Market
UK wholesale gas prices extended losses on Tuesday despite U.S.-Iran peace talks remaining deadlocked. While geopolitical uncertainty continues to limit the downside, above-seasonal temperatures across the UK are weighing on demand. The front-month May-26 contract fell 2.38p to settle at 108.41p/th, while the Winter-26 contract declined by 2.24p to 110.30p/th. The summer-winter spread remains narrow as the market begins to factor in strong storage injection demand across Europe, with depleted inventories needing to be rebuilt. Weakness was also evident in the prompt market, pressured by milder weather and increased Norwegian supply compared to the previous day. The Day-Ahead contract closed at 105.25p/th, down 4p on the session.
Power Market
The downward move, concentrated at the front of the curve on wholesale gas markets, saw the front season, Winter-26, fall by £1.30 to £94.50/MWh. Summer-27 also posted a modest decline and was the only summer contract to soften, as persistently firm carbon prices outweighed marginal losses further on the NBP market. On the prompt, strong solar generation pushed the day-ahead baseload price down to £65.25/MWh, with demand expected to ease in tandem.
EUAs continued to trade around the €75/tonne level, showing limited deviation from this anchor point. Strong participation in yesterday’s auction did little to shift prices, with EU policy remaining the primary driver of the market.
Oil Market
The front-month Brent crude contract settled at $111.26/bbl on Tuesday, extending a week-long rally as supply concerns tied to the effective closure of the Strait of Hormuz outweighed bearish signals from the United Arab Emirates’ planned exit from OPEC+. Despite the prospect of additional UAE output following its departure, the market remains focused on disrupted flows through the key transit route, which typically handles around 20% of global crude and LNG shipments. With U.S.-Iran negotiations stalled and maritime traffic constrained, traders are pricing in a prolonged supply bottleneck, even as some vessels cautiously resume transit. Rising volumes of crude in floating storage, now at their highest levels since January, underscore the growing backlog of tankers unable to pass through the Strait. In the U.S., gasoline prices have climbed to their highest level in nearly four years after American Petroleum Institute data showed a sharp draw in inventories.
Markets this morning
Natural gas and crude oil prices are trading higher again this morning following reports that the U.S. is preparing for an extended blockade of Iran, further intensifying concerns over already disrupted Middle East flows. As a result, the May-26 gas contract is up 2.30p/th from Tuesday’s close in its final session, while the Jun-26 crude contract is last seen at $114.76/bbl, a gain of $3.50. Despite yesterday’s announcement that the UAE plans to withdraw from OPEC this Friday, there has been little meaningful impact on pricing. Market participants suggest the UAE may seek to lift output outside OPEC quotas, but with the Strait of Hormuz still closed, any additional barrels face no clear route to international markets, limiting the immediate price response.
