Gas Market
Near NBP futures opened around a penny lower and continued to fall on Wednesday after Donald Trump posted that much progress had been made in the peace talks and an agreement could be close. The front month for the NBP curve, June, traded down to a low of 99.00p per therm which was 16.02p below Tuesday’s settlement. The market started to tick up just after midday, with new posts from the U.S. President which threatened strikes on Iran if no deal is agreed which took the shine off the earlier optimism of a peace deal. Iran also launched a new agency, The Persian Gulf Strait Authority, which aims to collect tolls from shipping using the Strait of Hormuz. June eventually settled at 107.56p, posting a day-on-day decline of 7.46p. The remaining summer months averaged losses of 7.58p while the Winter-26 contract closed 7.68p down at 110.06p. Prompt prices also relinquished premium yesterday with the Spot and Day ahead products shedding 5.50p and 7.52p respectively.
Power Market
The sharp declines witnessed on the NBP curve weighed on baseload power futures yesterday. Fresh optimism for a peace deal with Iran sent gas and power prices plunging after Donald Trump posted that a deal could be near. The June contract for baseload shed £4.65/MWh to settle at £91.60/MWh while the Winter-26 contract declined by £5.70/MWh to close at £94.00/MWh. Baseload for the Day ahead eased slightly with low wind limiting the downside.
An early spike in carbon prices was reversed leaving EUAs marginally higher on Wednesday. Contracts out to Dec-28 settled an average of €0.29 / tonne higher. UKAs weakened through the afternoon, and contracts settled 3.5% or an average of £1.84/ tonne lower.
Oil Market
Reports that the U.S. and Iran were nearing a peace deal sent crude oil prices tanking yesterday. Brent traded to a low of $96.75 a barrel after mediators from Pakistan confirmed that Iran were considering a 14-point memorandum from the U.S. Losses were pared back over the afternoon as Trump posted that Iran should take the deal or risk further strikes, while Iran’s initial response was to say it was a wish list from Donald Trump. A peace deal would lead to the reopening of the Strait of Hormuz, it is expected that it could take six to eight weeks for normal flows through the channel to return. At the close, the July contract for Brent was down $8.60 to $101.27 a barrel. The June contract for West Texas Intermediate, the U.S. benchmark, shed $7.19 and settled at $95.08 a barrel.
Markets this morning
The sharp losses witnessed in the crude oil markets yesterday have been consolidated this morning as Brent has shed a further $2.00 a barrel, with June last exchanging at $99.23 a barrel. It’s still believed that the U.S. and Iran are close to agreeing a peace deal and Donald Trump posted last night that the war will end quickly. It is expected that Iran will respond to the latest memorandum later today and the markets remain optimistic. Near NBP futures have eased this morning with near months around a penny per therm below last night’s close. The June contract last traded at 106.38p while the Winter-25 contract is down 1.86p to 108.20p. Prompt prices have yet to get going but the Spot may find support from a short gas system against today’s demand of 169mcm.
