Gas Market
The wholesale UK gas market was largely flat on Friday with little change to the geopolitical outlook as the conflict between Iran and the U.S. continued without a peace deal. Modest losses were registered on the near curve despite mutual threats being administered by both Washington and Iran, with the latter warning of a strong retaliation should attacks resume. The front month contract, which remains most sensitive to the geopolitical uncertainty, shed 0.78p day-on-day to settle at 112.10p per therm. Meanwhile, the Winter 26 contract posted a negligible day-on-day increase of 0.09p to close out the session at 115.39p per therm. LNG supply flows were constrained, with further declines expected this week amid no scheduled arrivals, which hampered losses on the prompt market. The Day ahead contract shed 0.40p day-on-day to close at 111.40p per therm, while the Spot market displayed similar movement, with the Within day contract declining by 0.30p to settle at 111.50p per therm.
Power Market
Movement was mixed across the GB Baseload curve on Monday. The front two moths took direction from the modest losses exhibited by the UK gas market, with the June 26 contract shedding £0.50/MWh to settle at £92.75/MWh. Further out, the Winter 26 contract posted a £0.60/MWh day-on-day increase to close out the session at £97.50/MWh. Low wind forecasts for early this week as well as cooler temperatures lifted the prompt market, with the Day ahead contract increasing by £11.58/MWh to settle at £108.25/MWh.
European carbon markets edged higher on Friday as Iran downplayed the likelihood of a ceasefire agreement with the United States. Dec 26 European Allowances increased by 39 cents day-on-day to close out the session at €73.87 a tonne.
Oil Market
While UK wholesale gas markets were closed on Monday due to the UK bank holiday, crude oil prices increased by almost 6% as geopolitical tensions in the Middle East increased. In what was deemed the most serious escalation since the U.S.-Iran ceasefire came into force in early April, Iran stepped up attacks on the United Arab Emirates as well as ships in the Middle East Gulf. Iran hit several ships in the Strait of Hormuz on Monday and set a UAE port ablaze, as President Trump’s attempt to use the U.S. Navy to free up shipping provoked the bullish response. Meanwhile, the US military said it destroyed six Iranian small boats and intercepted Iranian cruise missiles and drones fired by Tehran. Amidst the increased in military strikes, the front month Brent contract increased by $6.27 by the close on Monday to settle at $114.44 a barrel.
Markets this morning
The gas markets were closed on Monday due to the UK bank holiday, with UK wholesale gas prices responding strongly this morning to increased geopolitical tensions between the U.S. and Iran. Donald Trump stated that the U.S. shot down seven Iranian boats on Monday, while Tehran has denied the claim. Meanwhile, the speaker of the Iranian parliament warned the U.S. that “we are just getting started” following attacks in the Strait of Hormuz. With a peace deal in the near-term looking less likely, the front month NBP contract last went through at a 6.47p premium to Friday’s close. Crude oil prices have slipped back slightly this morning as tensions in the Middle East rage on. The front month Brent contract last went through at $112.63 a barrel, down $1.81 on its previous close.
