Gas Market
UK wholesale gas was highly headline-driven on Monday, swinging sharply throughout the session in response to developments in the Iran conflict. The front-month NBP contract initially surged 2.79p to 126.45p/therm after Trump warned that time was running out for Iran to reach a deal, before retreating and then recovering again as both the U.S. and Iran rejected proposed peace conditions. The contract ultimately finished down 0.36p at 123.30p/therm after reports that the U.S. could ease sanctions on Iranian oil exports helped calm broader energy market tensions. The day-ahead contract also eased, declining 2.6p to 123.75p/therm. Fundamentals across north-west Europe remain firmly bearish over the next two weeks, with demand forecasts revised lower on the back of warmer temperatures, strong solar output and a sharp pickup in wind speeds expected tomorrow.
Power Market
GB baseload power contracts broadly tracked the gas curve on Monday, rising early in the session before pulling back on reports of easing U.S. sanctions on Iranian crude. The front month settled 5p higher at £102.5/MWh, to record a seventh consecutive session of gains. The prompt market fared less well, with the day-ahead contract shedding £25.75 to £90.5/MWh as forecasts for warmer temperatures and stronger renewable output weighed on near-term prices.
Carbon markets edged marginally lower, with Dec-26 EUAs initially rallying to €76.70 on supportive fundamentals before retreating alongside oil and gas after the Iranian sanctions reports. The contract settled at €75.55/tonne, down 0.1% on the day, remaining firmly rangebound despite the broader volatility across energy markets.
Oil Market
Oil prices climbed to a two-week high on Monday as volatile trade reflected deepening anxiety over supply disruptions from the Iran conflict, even as reports emerged that the U.S. had agreed to waive sanctions on Iranian crude during ongoing talks. Front-month Brent for July delivery settled up $2.84, or 2.6%, at $112.10 a barrel, though gains pared after the close when President Trump announced he would hold off a planned attack on Iran scheduled for Tuesday. The supply picture remained grim. IEA head Fatih Birol warned that commercial inventories were depleting rapidly by approximately 4 million barrels per day, with only weeks’ worth remaining as the conflict and closure of the Strait to shipping continued to weigh on global flows. China’s April crude throughput meanwhile fell to its lowest since August 2022, as the war curtailed refinery runs in the world’s second-largest oil consumer. On the sanctions front, the U.S. Treasury extended a waiver on Russian seaborne oil purchases for another 30 days to support energy-vulnerable countries cut off from Gulf supplies.
This Morning
Energy markets are mixed this morning after Donald Trump confirmed he had called off new strikes on Iran at the request of Gulf states, citing “serious negotiations” with Tehran. He cautioned, however, that the U.S. was prepared for a “full assault” should talks fail to produce a deal. Near-curve NBP gas contracts are up an average of 1.07p on the back of the news, while Brent crude has eased $1.79 to $110.31/bbl. Prompt gas trade remains muted so far, though bearish fundamentals are expected to be partially offset by supply-side tightness. Maintenance shutdowns at Norwegian facilities Troll and Kollsnes will reduce flows via Langeled to just 4mcm/d tomorrow, down sharply from 30mcm/d today and well below the pipeline’s 70mcm/d capacity.
