Gas Market
NBP gas contracts settled lower on Thursday, retreating from early session gains as milder fundamentals outweighed geopolitical support. Prices pushed higher in early trading, buoyed by lingering tensions in the Strait of Hormuz and reports that President Trump was preparing further military action against Iran, raising the prospect of further extended LNG supply disruption. The gains proved short-lived, however, with selling pressure building steadily through the session. The new front-month June-26 contract shed 2.86p to settle at 112.88p/therm, having reached an earlier high of 120p. The front winter contract also slipped into negative territory, closing down 2.8p at 115.3p/therm. Bearish weather forecasts added to the downward pressure, with temperatures expected to average a well-above-seasonal 14.5°C for the remainder of the week. The day-ahead contract declined 2.4p to close at 111.8p/therm.
Power Market
GB baseload prompt prices broadly tracked NBP gas movements on Thursday, though near-curve contracts found support from a sharp drop in wind generation. The May contract expired up 15p on the day at £92.75/MWh, with falling wind output lending support to near curve contracts. The day-ahead contract gained 84% to £97.25/MWh as wind generation dropped sharply from a well-above-average 18GW to 5.76GW. Further along the curve, prices declined in line with the broader gas sell-off, with the new front-month contract shedding 95p to settle at £93.25/MWh.
European carbon allowances edged higher on Thursday, holding their negative correlation with gas prices amid a volatile energy market. The Dec-26 EUA contract settled up 0.8% at €73.79/tonne, supported by steady buying throughout the session.
Oil Market
Global oil prices eased on Thursday after hitting a four-year high, as concerns mounted that the U.S.-Iran conflict could trigger a prolonged disruption to Middle East supply. Front-month Brent for June delivery surged as high as $126.41 a barrel, its peak since March 9, 2022, before pulling back to settle down $4.02, or 3.41%, at $114.01. The June contract expired on Thursday, marking a fourth consecutive month of gains for Brent crude. The more active July contract edged higher, settling up 44 cents, or 0.4%, at $110.88. Prices climbed earlier in the session after reports emerged that U.S. President Trump was set to receive a briefing on plans for a series of military strikes on Iran, aimed at pressuring Tehran back to the negotiating table over its nuclear programme. Shipping data showed just seven vessels crossed the Strait of Hormuz in the past 24 hours, against a daily norm of 125 to 140 ships, highlighting the closure of the strait as the dominant near-term risk to global supply. That concern is seen as overshadowing longer-term questions about OPEC+’s waning influence, after the UAE quit the group following years of tension over production quotas.
Markets this Morning
European gas prices edged higher on Friday morning as efforts to resolve the Iran conflict remained at an impasse and Strait of Hormuz shipping stayed near a standstill. The front-month NBP Jun-26 contract is up 1.52p at 114.4p/therm, with Winter-26 gaining 1.8p to 117.1p/therm. Supply remains constrained by weak LNG sendout, expected to fall a further 2mcm/d on the day-ahead amid no scheduled arrivals, while an outage at Oseberg has cut Norwegian flows via the Langeled pipeline by 7mcm/d to 37mcm/d. With winds forecast well below seasonal norms, UK gas-for-power consumption is expected to rise 10mcm/d to 34mcm/d on the day-ahead. Front-month Brent has also pushed higher, with the new prompt contract up $1.34 at $111.76/bbl as geopolitical risk continues to underpin oil markets.
