Gas Market
UK gas prices declined on Tuesday, largely giving back Monday’s gains on bearish geopolitical sentiment. Trading was muted for much of the session until late comments from President Trump drove prices lower. He told reporters he is in the “final throes” of a deal with Iran, adding that the Strait of Hormuz would reopen immediately upon signing, possibly “within two or three days”. The July-26 contract dropped 3.34p to 117.19p/therm, while the Winter-26 contract fell 2.28p to 121p/therm. On the supply side, Norwegian output rose by 10 million cubic metres per day as maintenance impacts ease. Storage remains in focus, with injections picking up over the past week to bring levels to 42.79% full, though still 9% below this time last year. The NBP day-ahead contract fell 3p to 118.5p/therm amid low gas demand.
Power Market
The GB Baseload front month contract fell £3.15 to £102.25/MWh, falling in line with a decline in NBP gas. The day-ahead contract moved in the opposite direction with the day-ahead contract rising £9 to £113/MWh due to low wind generation forecast for Wednesday. Wind generation is forecast to fall from 13.2GW to 4.7GW on Wednesday, well below the seasonal norm.
EU carbon allowances fell back towards the €76 mark on Tuesday in a muted session that drew thin trade with the benchmark generally following gas and power movements. The Dec-26 EUA settled down 1% at €76.15/tonne. Carbon market participants will be looking to Wednesday’s Commitment of Traders (COT) report after last week’s data showed a strong build in bullish bets by speculators.
Oil Market
Oil prices dropped about 3% on Tuesday to a seven-week low after Iran and Israel announced a halt to attacks on each other. Front-month Brent fell $2.80 to settle at $91.4/bbl, its lowest close since April 17 and its first settlement below the 100-day moving average since January. The ceasefire defused the latest escalation, while Trump added further downward pressure by suggesting an end to the war could be near, with negotiations reportedly in their final stages. Demand-side news reinforced the bearish tone. China’s May crude imports slumped 29% to an eight-year low, extending a sharp decline in the world’s largest oil importer that continues to cap global prices. Meanwhile, the EIA projected the Iran war would cut world petroleum production to an average of 99.0 million bpd in 2026, down from a record 106.1 million bpd in 2025. It also forecast global demand sliding to 102.9 million bpd in 2026 from a record 104.0 million bpd in 2025, with countries drawing on storage to cover shortfalls, pushing OECD inventories to their lowest level since the agency’s records began in 2003.
Markets this morning
UK natural gas contracts traded a touch firmer on Wednesday morning as fresh hostilities between the U.S. and Iran dampened hopes of a peace deal and Norwegian exports are set to drop on rising maintenance outages. The NBP front month is up 0.67p at 117.86p/therm. A fresh escalation in the Gulf threatens to unravel the fragile ceasefire, with the U.S. military striking Iranian targets after Trump vowed on Tuesday to respond to the downing of a U.S. Apache attack helicopter. On the supply side, maintenance announced at the Troll field and the Kollsnes processing plant will cut 46 mcm per day of supply from Thursday until 15 June. Brent crude last traded down 50c at $90.95/bbl with weak Chinese imports offsetting the geopolitical tension.
