Gas Market
UK wholesale gas prices were mixed on Thursday, with prompt contracts and the curve out to Q4-26 rising while further-dated contracts fell. The front-month NBP June-26 contract gained 1.75p to 116.78p/therm, while Summer-27 slipped 1.69p to 84.67p/therm. The divergence may signal storage hedging as the summer injection period picks up, with EU storage sitting at 35.57%, some 7.51% below this time last year. The bloc is targeting 90% capacity by November, though the European Commission signalled in April its readiness to allow flexibility, encouraging member states to target 80% as an alternative amid tight global LNG supply. Supply concerns added further support. Increased spot demand from Asian buyers is intensifying competition for U.S. LNG, while strike action at Australia’s Ichthys LNG facility from May 15 added to the sense of tightening global supply. On the prompt, the day-ahead rose 1.21p to 120.2p/therm, supported by colder weather boosting gas-for-power demand and a modest dip in Norwegian flows via Langeled following a one-day maintenance outage at Emden.
Power Market
GB baseload power contracts broadly tracked the NBP gas curve on Thursday, with the two front quarters rising on the day while all quarterly contracts for 2027-29 delivery fell. The front-month June contract gained 80p to settle at £98.55/MWh, while Q1-27 led losses, dropping 70p to £97.55/MWh. Carbon markets were subdued. The Dec-26 EUA settled up just 1 cent at €75.08/tonne on thin volume of 8.9Mt, well below the previous day’s 26Mt.
UK allowances edged higher, with the front December UKA settling 19p up at £51.88/tonne. Political risk, however, crept back into focus for UK carbon markets. The resignation of a key government minister rattled Westminster, with many viewing the move as a weakening of Prime Minister Keir Starmer’s position. The political uncertainty adds a layer of risk to ongoing talks around linking the UK and EU carbon markets.
Oil Market
Oil prices ended little changed on Thursday after Iran’s state media reported around 30 vessels had crossed the Strait of Hormuz, though fresh incidents kept markets on edge. Front-month Brent crude settled 9 cents higher at $105.72/bbl, recovering modestly after falling more than $2 the previous session as investors weighed the risk of U.S. interest rate hikes. 30 vessels were confirmed by Iran’s Revolutionary Guards to have transited the Strait on Thursday, remaining well short of the typical pre-war daily total of 140. Driving concern were two incidents: an Indian cargo vessel carrying livestock from Africa to the UAE was sunk off the coast of Oman, while reports emerged that unauthorised personnel had boarded a separate ship off the UAE port of Fujairah and were steering it toward Iran. Tehran also appears to be tightening its grip on the waterway, striking deals with Iraq and Pakistan to ship oil and LNG from the region. U.S. and Chinese leaders, meeting on the sidelines, agreed the strait must remain open for the free flow of energy, with Beijing expressing interest in purchasing more U.S. crude to reduce its reliance on the route.
This Morning
European gas prices are pushing higher Friday morning, tracking oil markets up after President Trump warned his patience with Iran was running out, stoking fears of renewed conflict. The front-month NBP Jun-26 is up 4.16p at 120.94p/therm, with attention returning to the Strait of Hormuz deadlock after the U.S.-China summit yielded no breakthrough on Iran. On the prompt, however, warmer weather forecast for the UK next week is expected to act as a significant bearish counterweight. Brent crude is up $3.42 at $109.05/bbl, reflecting the heightened risk premium around a potential escalation following Trump’s comments. Carbon EUAs are flat this morning with the front December contract down 4c at €75.05/tonne.
