Gas Market
NBP front month rose 4.37p to close at 101.06p/therm on Friday, with contracts as far out as Winter-26 making similar gains. The moves higher along the forward curve followed a week of declines driven by a significant de-escalation in Middle East tensions, culminating in last week’s US-Iran ceasefire, which is intended to lay the groundwork for a more durable settlement. The rebound came as Israel stepped up attacks on Lebanon and as talks planned for Friday to firm up the preliminary agreement to end US-Iran hostilities were cancelled. Despite the daily gain, the front month ended the week down 9.7%. High temperatures forecast across Europe next week are likely to support cooling demand and may disrupt nuclear output, boosting gas-fired power generation and limiting storage injections. This helped lift the NBP day-ahead 3.75p to 102.75p/therm on Friday.
Power Market
GB Baseload contracts tracked gains in gas and carbon, with the front month increasing on Friday £3.2 to £94.80/MWh as renewed attacks in Lebanon and the cancellation of talks intended to pave the way for lasting truce between the U.S. and Iran dimmed market sentiment. Despite the increase on Friday, the contract was down 3.6% over the week. On the prompt, lower wind generation forecast for next week and reduced nuclear availability pushed the day ahead up 21.2% to £118.5/MWh.
The Dec-26 EUA closed last week at €80.58/tonne, up 4.42% week on week, as markets assessed the implications of the interim U.S.–Iran deal, the higher compliance demand from the power sector amid the heatwave in Western Europe, as well as the looming EUA option expiry on June 24. The EUA is likely to be further supported by compliance demand today as well as U.S. and Iran progress during talks in Switzerland on Monday toward reaching a final deal within 60 days, including the agreement to establish a committee and a mechanism to end hostilities in Lebanon.
Oil Market
Brent crude edged higher on Friday but remained on track for a weekly loss of around 8%, after Israel and Hezbollah agreed to a ceasefire in Lebanon while Iran set conditions on the use of the vital Strait of Hormuz. Front month Brent settled 72 cents higher on the day at $80.57 a barrel, with trading volumes thin owing to a U.S. federal holiday. Gulf producers prepared to ramp up exports following the ceasefire, which took effect at 4 p.m. local time on Friday. At least four tankers carrying crude, refined products and liquefied petroleum gas entered the Strait of Hormuz during the session, bound for Iraqi Gulf ports. Even so, Iran signalled tighter control over shipping, with state TV reporting that vessels must coordinate their transit with the Revolutionary Guards navy. The deal struck last week between Washington and Tehran is expected to release more than 85 million barrels of oil currently stranded in the Middle East Gulf into global markets. It also provides for the lifting of U.S. sanctions on Iranian oil, which would bring additional supply onto the market.
Markets This Morning
Gas prices are higher this morning after Iran reclosed the Strait of Hormuz in response to Israeli strikes on Lebanon over the weekend, with the UK NBP front month up 1.03p at 102.09p/therm. The strikes threatened to derail efforts to end the US-Iran war that followed last week’s memorandum of understanding. Sentiment was also hit by an explosion at Qatar’s Ras Laffan LNG complex as workers restarted operations halted after an Iranian attack in March. Authorities described it as a ‘technical accident’ at the Barzan local gas supply facility but did not say whether the plant was damaged. Brent crude is down $1.46/bbl this morning after progress was reported in US-Iran talks on Sunday, with Tehran saying it had secured waivers for oil and petrochemical exports, easing concerns over a global supply shortage.
