Gas Market
After rising gradually throughout the session on Thursday amid growing concerns that the ceasefire between Iran and the U.S. could unravel, UK wholesale gas prices fell back late in the afternoon following unconfirmed reports that the two parties had reached a deal. The reports outlined a 60-day memorandum of understanding to extend the ceasefire, launch negotiations on Iran’s nuclear programme, and reopen the Strait of Hormuz, pending President Donald Trump’s final approval. In response to the renewed optimism around an agreement, the front month contract fell back from an intra-day high of 118.85p per therm, to expire at 113.94p per therm. Meanwhile, movement across the prompt was mixed, with the Day ahead contract shrugging off the near curve strength and declining temperatures to post a day-on-day loss of 0.25p. In contrast, the Within day contract was supported by high gas-for-power demand levels, increasing by 0.30p by the close to settle at 112.50p per therm.
Power Market
Near curve GB Baseload contracts rose on Thursday as renewed military activity in the Middle East diminished hopes of a near-term resolution to the conflict. The front month June contract posted a £2.00/MWh day-on-day gain to settle at £100.75/MWh. Meanwhile, declining temperatures coupled with higher gas-for-power demand consumption levels supported the prompt, although gains were muted. The Day ahead contract rose by £0.72/MWh to settle at £102.00/MWh.
European carbon markets surpassed the €80.00 a tonne mark for the first time since February on Thursday, following a volatile trading session across the wider energy complex. Dec 26 European Allowances increased by €1.36 by the close to settle at €80.07 a tonne.
Oil Market
Crude oil prices settled marginally lower on Thursday following a volatile trading session driven by conflicting reports over a potential extension of the ceasefire between the U.S. and Iran. Prices initially rose after Iran’s Revolutionary Guards reportedly struck a U.S. airbase in retaliation for an earlier U.S. attack on the port city of Bandar Abbas, underscoring the fragility of the ceasefire agreement. However, the market reversed course later in the day amid unconfirmed reports that both sides had agreed to a 60-day ceasefire extension, pending final approval from President Donald Trump. After climbing to an intra-day high of $98.20 a barrel, the front month Brent contract ultimately settled down 58 cents on the day at $93.71 a barrel. In contrast, the West Texas Intermediate (WTI) contract for July delivery rose by a marginal 22 cents to close out the session at $88.90 a barrel.
Markets this morning
Following yesterday’s unconfirmed reports that an agreement had been reached between the U.S. and Iran, U.S. Vice President J.D. Vance has stated that the two parties are “very close” to a deal and that the framework for a ceasefire extension had been agreed, pending the approval of Donald Trump and Iran’s leadership. UK wholesale gas prices are taking a cautious approach to this news, with prices so far this morning retracing a portion of yesterday afternoon’s losses. The July contract has now taken over as the front month, and most recently went through at 114.75p per therm, up 1.32p on its previous close. Meanwhile, crude oil markets appear more optimistic, with the front month Brent contract most recently transacting at $92.53 a barrel, down $1.18 day-on-day.
