Gas Market
The gas markets opened firmer after the long weekend in the UK and near wholesale futures contracts increased by around 7.00p through the early session. The gains were in response to increased geopolitical tensions in the Middle East over the weekend and fears that the attacks on Iranian fast boats in the Strait of Hormuz could threaten the ceasefire between the U.S. and Iran. NBP futures started to yield the early gains after a press conference from Pete Hegseth. The U.S. Defence Secretary stated that the ceasefire is still intact, however, he called for other nations to step up as the U.S. defence of the shipping channel would be only temporary. The front month for the NBP settled 2.92p per therm higher at 115.02p while the Winter-26 contract added 2.35p to close at 117.74p. Prompt prices were lifted by the near curve gains and forecasts for lighter wind generation which could add to gas demand.
Power Market
GB baseload futures tracked the NBP gas curve higher yesterday while gains to carbon also provided support. The front month posted the greatest gain of the day, settling at £96.25/MWh, £3.50/MWh higher. A little further along the curve, the Winter-26 contract added £2.20/MWh to close at £99.70/MWh. Forecasts for lower wind generation added to the prompt and baseload for the day ahead settled at £108.93/MWh yesterday.
Carbon prices rallied after the long weekend as leaked proposals from the EU Commission appeared to show that the free allocation benchmarks may not be materially different. It was hoped that the free allocation would be more generous under the new proposals. European Allowances for Dec-26 and Dec-27 settled an average of 2.6% or €1.97 per tonne higher.
Oil Market
Crude oil prices reversed most of Monday’s gains yesterday after the U.S. Defence Secretary, Pete Hegseth, stated that the ceasefire with Iran remains intact despite clashes on Monday. In a press conference he talked about operation ‘Project Freedom’ which aims to free up tankers and shipping vessels caught in the strait of Hormuz. Yesterday two vessels were shepherded through the channel by the U.S. navy. As this was happening the United Arab Emirates reported it was under attack by missiles and drones which was later denied by Iran. Efforts for a peace deal continue in the background with mediators from Pakistan trying to get both sides back together for talks. At the close, the July contract for Brent was $4.57 down at $109.87 a barrel.
Markets this morning
The energy markets are in decline this morning following the posts from President Trump which is pausing ‘Project Freedom’ as he believes a lot of progress has been made to complete a deal with Iran and an agreement could be close. NBP futures opened around a penny lower but have continued to decline and the front month last traded at 106.35p per therm, down 8.67p on last nights close. Further out, the winter is 7.49p lower at 110.25p. In the crude oil markets, Brent for July delivery has yielded $6.82 to last exchange at $103.05 a barrel. Closer in, on the prompt, the Day ahead product is down 6.80p to 110.00p while the Spot has yet to trade.
