Gas Market
Near months for the NBP remained volatile in the early part of Thursday morning before increasing in the afternoon following the latest post from Donald Trump. The U.S. President threatened to hit Iran ‘very hard’ and suggested they would take Kharg Island, the distribution base around 300 miles north of the Strait of Hormuz from where Iran exports much of its oil. Gains were pared back later in the session and near months settled marginally lower with July closing at 119.76p per therm, down just over a half a penny. Losses diminished on contracts out to the Winter and futures past this were slightly higher at the close. Prompt prices eased yesterday with forecasts for a strong performance from wind likely to curb gas demand for the power stack. Scheduled maintenance works continues at several Norwegian gas plants and exports remain tempered while works continue. Separately, Gassco reported they hoped to repair a compressor failure at the Troll field before the weekend.
Power Market
The uncertainty witnessed in the UK gas futures market was also present in trades for baseload power futures on Thursday. The near curve shifted between gains and losses before easing late in the session. The front month contract declined by £0.70 to £103.55/MWh. The Winter-26 contract was just £0.10/MWh down at the close. Baseload for the Day ahead fell sharply on strong wind generation expected on Friday.
Both EUAs and UKAs settled lower yesterday as markets took stock after the recent selloff. There are reports suggesting the EU Commission is considering increasing free carbon allowances for industries investing in European clean tech while the Commission is also looking at ways a carbon price can be applied to the aviation sector.
Oil Market
Crude oil prices traded lower on Thursday morning despite the U.S. and Iran trading strikes for a second night. The fragile ceasefire is under threat if these strike backs escalate but Qatari mediators continue to suggest that negotiations between the U.S. and Iran remain on track. The markets largely ignored Trumps afternoon post in which he stated they were going to hit Iran ‘very hard’ and suggested going after Iran’s Kharg Island to cripple Tehran’s oil distribution and revenue stream. Just before the close, Trump stated the attacks on Iran would be cancelled as he believed their Supreme Leader had accepted the deal. The August contract for Brent traded to a low of $88.44 before going on to settle at $90.38 a barrel, down almost 3.0%. In Europe, the ECB announced an increase of 0.25 of a percentage point to interest rates as a measure to try curb inflation across the Eurozone. The new Chair of the U.S. Federal Reserve, Kevin Warsh, is to hold his first policy meeting next week and while he is under pressure to cut interest rates from President Trump, he may also have to target rising inflation which has topped 4.2% in the U.S. this week.
Markets this morning
NBP futures have fallen sharply after last night’s post from the U.S. President in which he stated he believed a deal had been accepted by Iran’s Supreme Leader and expected a signing of the agreement to be arranged soon. A spokesperson for Iran’s Foreign Ministry has denied this claim stating the latest text is still under review. The July contract is down over 10.00p to 109.68p per therm while the Winter-26 product last traded at 116.00p which is a fall of 8.29p. In the crude oil markets, Brent has continued to slide with the last exchange for the August contract going through at $86.58 a barrel which is $3.80 down from last nights close.
