Gas Market
Early losses to the near curve of the NBP were sustained for much of the session yesterday until media reports quoted Donald Trump as saying that the U.S. and Iran are in the final stages of a peace agreement. Earlier the U.S. President had said he was in no hurry for a deal to be signed but had threatened Iran with ‘ending’ the war. Prices fell sharply late in the day following reports from the Saudi news agency which stated there could be an announcement of a final peace deal on Thursday as the latest proposal from the U.S. is under consideration by Iran. The front month for the NBP fell to 116.54p per therm before settling at 120.71p and posting a loss of 5.94p. The Winter-26 contract declined by 4.04p to 122.00p having traded to a low of 118.65p. Prompt prices also weakened yesterday with increased wind forecast for Thursday adding to the downside for the day ahead which closed 8.20p lower.
Power Market
Late reports that a peace agreement between the U.S. and Iran could be close pressured the NBP curve yesterday and GB baseload futures followed gas prices lower. The front month for the power curve, June, shed £3.60/MWh to settle at £101.15/MWh while the contract for Winter-26 eased by just £0.80/MWh due to poorer liquidity. Carbon EUAs recovered Tuesday’s losses as contracts out to Dec-28 settled an average of 0.9% or €0.73/ tonne higher.
Wind generation is forecast to increase to around 10.7GW for Thursday, which is above the recent average but baseload for the Day ahead increased yesterday. The power system operator, NESO, has implemented a temporary restriction limiting within day trading through the interconnectors with Europe to 300MW on each line.
Oil Market
Oil prices fell sharply on Wednesday, with front-month Brent crude settling at $105.02 a barrel, down $6.26, while U.S. West Texas Intermediate dropped $5.89 to $98.26. The sell-off came after President Trump said negotiations with Iran were in their final stages, though he warned of further attacks if no deal was reached. Iran’s foreign ministry signalled some willingness to cooperate, with spokesperson Esmaeil Baghaei saying Tehran was ready to develop protocols for safe shipping in the region. Market participants remained cautious. The premium on near-term Brent contracts for delivery next month over six-month forward contracts stood at around $20 a barrel, well below last month’s highs above $35, suggesting some easing of supply concerns. Three supertankers carrying roughly 6 million barrels of Middle Eastern crude also began crossing the Strait of Hormuz on Wednesday, bound for Asian markets after waiting in the Gulf for over two months. Before the war began, shipping traffic through the strait averaged 125 to 140 daily passages.
Markets this morning
After yesterday’s late reports of a possible peace agreement with Iran, the markets are waiting for further news today. It is believed Iran is considering the latest U.S. proposal and initial signals from Tehran were positive. Market participants remain cautious however as a deal was said to be close two weeks ago but fell through at the eleventh hour. UK gas prices have eased slightly with the front month down by 1.23p while the winter has declined by around a penny per therm. The prompt screen is displaying flat prices while the UK gas system forecasting a slight deficit this morning. In the crude oil markets, Brent is flat with the latest exchange for the July contract going through at $105.01 a barrel.
