Gas Market
As the peace talks between Iran and the U.S. appear to have stalled, the GB gas market was broadly flat on Wednesday. President Trump was off to China for a state visit to renew relations and build up trade, but the Vice President, JD Vance, said he believed progress is being made in the peace negotiations. Near NBP futures traded in a tight range with early losses giving way to minor gains midway through the session and prices stayed relatively flat from there on. The front month settled 0.23p per therm above Tuesday’s close and this was close to the average gain for the day for contracts out to the front winter. Seasonal contracts past the Winter-26 were mixed. Forecasts for a drop in temperatures into the weekend supported prompt products out to the weekend product. The Spot and Day ahead contracts were less than a penny higher at the close while the Weekend added 1.40p.
Power Market
GB baseload futures settled mixed on Wednesday as the near curve posted modest gains while futures from 2027 out ended the day a touch lower. The movement through the day was similar to that of the NBP curve with losses to near months being reversed over the session to leave the remaining months of the summer an average of £0.40/MWh. Weaker carbon pressured the longer curve on the day as EUAs fell by an average of 1.0% or €0.75 per tonne.
Cooler temperatures are forecast through the weekend but an increase in wind generation could counter the increased heating demand so the prompt was marginally up at the close. Baseload for the Day ahead settled 1.6% or £1.66/MWh higher at £103.82/MWh. Wind generation has averaged 8.2GW/ day over the past week which accounted for 28.7% of GB generation.
Oil Market
As the new Federal Chair, Kevin Warsh, was confirmed by the U.S. Senate yesterday, there are fears that the Fed will have to increase interest rates for the world’s largest economy. The new Chair was selected by Donald Trump to replace Jerome Powell, and will be expected to keep interest rates low, but pressure is mounting to increase interest rates as the inflation rate hit 3.8% due to the war with Iran. With Donald Trump heading to Beijing, a Chinese super tanker laden with crude oil passed through the Strait of Hormuz on route to China yesterday. The peace talks with Iran appear to have stalled, however, JD Vance said yesterday that negotiations to end the war are progressing. At the close, Brent for July delivery was down $2.14 to $105.63 a barrel.
Markets this morning
As Trump was given a warm welcome in Beijing the markets will watch for outcome of his meetings with Xi Jinping. In the crude oil markets, Brent has added 71 cents a barrel to last trade at $106.34 with hopes that the meetings in Beijing will boost trade between the world’s top two economies. So far, the GB gas market is flat with the front month for the NBP last trading at 114.90p per therm which is just 0.13p down. Generally, all contracts that have traded are within +/- 0.20p of last nights close. GB gas demand is down to 140mcm today and the system is well supplied which should give comfort to the prompt when trading commences. Carbon EUAs have edged lower with the latest exchange for the Dec-26 contract going through at €74.85/ tonne.
