Gas Market
Near curve futures for the NBP ended the week with a modest decline on Friday while contracts past the front winter settled mixed. The front months eased by just under a penny on average on Friday, which brought the average gain for the week to 6.30p per therm. Most of that gain was down to last Monday and the expectation for a peace agreement between the U.S. and Iran which never came. The latest truce agreement between Israel and Lebanon failed to hold up for 24 hours as the media reported military strikes in Southern Beirut on Friday morning and the gas markets remained cautious. Prompt prices were mixed on Friday with the Spot reacting to a tight gas system and added 2.00p while forecasts for an increase to temperatures for the remainder of June weighed on the Balance of Month product which declined by 0.75p.
Power Market
GB baseload futures settled in line with movements on the NBP curve on Friday as near months posted marginal declines while the longer curve was mixed. The July contract eased by £0.15/MWh to £103.10/MWh which reduced the gain for the week to £4.15/MWh. Carbon EUAs for Dec-26 and Dec-27 yielded €0.41 per tonne on average while the Spot was down 0.5% or 36 cent per tonne.
Forecasts for wind generation increased from Friday’s levels but down from speeds forecast for the weekend. While wind should reach 9.0GW on Monday, temperatures are expected to rise which could increase cooling load and at the close, the Day ahead product settled marginally down at £100.59/MWh.
Oil Market
Crude oil prices fell on Friday on renewed hopes that the war between the U.S. and Iran would not escalate after Hezbollah rejected the truce between Israel and Lebanon. Brent for August delivery fell by 2.0% or $1.94 a barrel to $93.09, the lowest level for the week. The July contract for West Texas Intermediate shed $2.50 to settle at $90.54 a barrel. Brent was up almost two dollars a barrel for the five days after clashes between the U.S. and Iran flared up earlier in the week, stalling peace talks while shipping remains curtailed through the Strait of Hormuz. Strategic crude oil reserves are being utilised to top up available supplies and inventories are lasting longer than expected which has capped gains for crude oil prices. The U.S. naval blockade in the Strait of Hormuz has limited Iran’s oil exports which have fallen to the lowest levels seen for six years although demand in China has also weakened.
Markets this morning
The fragile ceasefire between the U.S. and Iran is being tested after the weekend as Iran and Israel traded missile attacks with each trying to blame the other side for starting it. Donal Trump is reported to have called Israel’s President, Benjamin Netanyahu and urged him not to retaliate and escalate the situation. Crude oil prices were up over 5.0% earlier this morning with Brent hitting a high of $98.08 a barrel. The latest trades for the global benchmark have gone through almost a dollar below that at $97.17 a barrel. In the UK gas markets July, the front month for the NBP, is trading 6.48p per therm above Fridays close while the Winter-26 contract is 5.90p up at 125.59p.
