Gas Market
UK wholesale gas prices settled lower on Friday amid reports that a peace deal between Iran and the U.S. was very close. Trading was slow as the markets waited for white smoke on the agreement between Washington and Tehran. President Trump said they would end the blockade in the Strait of Hormuz and would make a final call on the proposed agreement with his team in the situation room. In the absence of an announcement, NBP futures settled near the low of the day with losses for the front months averaging 2.77p per therm which took the loss for the week to an average of 9.32p. On Monday the markets rebounded, wiping out almost all last week’s losses after Iran insisted no deal can be done until Israel ceases attacks on Lebanon. The new front month for the NBP curve, July, added 8.30p to settle at 119.09p, further along the curve, the Winter-26 contract added 6.31p to close at 120.00p.
Power Market
The GB power market tracked gas prices lower on Friday with the June contract expiring at £100.00/MWh, falling £0.75/MWh on its final day in action. This was below the average loss of £1.05/MWh for the remaining contracts to the end of the year on Friday. Baseload futures rebounded on the back of the gains witnessed on the NBP curve yesterday and July the new front month settled £4.55/MWh higher at £103.50/MWh.
Carbon EUAs reversed Friday’s gains yesterday and some. The Dec-26 contract added 40 cent per tonne on the final day of the week but started off this week with a loss of 1.7% or €1.36 per tonne. With EUAs at four-month highs, there was an element of profit taking yesterday which led to a sell off in the afternoon session.
Oil Market
The July contract for Brent settled $1.66 a barrel down on Friday settling at $92.06 on its final day of trading. The August contract settled at $91.12 on Friday and assumed front month status yesterday. Brent ended the week lower with some optimism that a peace deal was very close and weighed on prices. However, the agreement never came, and Donald Trump is believed to have looked for changes in the proposed section relating to the Strait of Hormuz. Trump wants the Strait of Hormuz opened and Iran to clear mines to allow safe passage for shipping. In return, an extension to the ceasefire would allow for further discussions on Iran’s nuclear programme and the possibilities of lifting sanctions. Iran has demanded the ceasefire include Israel and Lebanon after the weekend’s attacks. The August contract for Brent added $3.86 yesterday and settled at $94.98 a barrel.
Markets this morning
The U.S. President has said he asked his Israeli counterpart and representatives from Hezbollah to de-escalate hostilities in Beirut, and both have agreed to stand down. This came after some choice social media posts by the U.S. President yesterday in which showed his frustration at the pace of progress for a peace agreement. The markets have responded positively to the news although still with caution. Near months for the NBP are showing losses of between 2.80p and 3.50p per therm with July last going through at 115.56p. Brent for August delivery is $2.11 a barrel down at $92.87 which is close to the low for the day. Carbon EUAs have also weakened this morning as contracts for Dec-26 and Dec-27 down by an average of €0.57/ tonne.
