Gas Market
UK NBP gas prices rose on Thursday after reports that Qatar is pausing efforts to rapidly restart production at Ras Laffan, the world’s largest LNG facility, following an attack on one of its tankers in the Strait of Hormuz. The incident renewed fears that transit through the crucial waterway remains too risky. The pause is one of the most high-profile fallouts from this week’s heightened tensions, which have included attacks on several ships near Hormuz and U.S. strikes on Iran for two consecutive days. Iranian forces retaliated on Thursday, striking U.S. military infrastructure in Gulf states. The NBP front month settled 4.13p higher at 120.83p/therm, its highest settlement since June 8th. A slower return of Qatari LNG exports threatens to tighten the global gas market further, risking more intense competition between Asia and Europe as both regions restock ahead of winter. Adding to the pressure, unplanned outages of uncertain duration at Norway’s Åsgard, Ormen Lange and Oseberg fields, combined with planned maintenance, cut upstream supply by 39mcm/day. This pushed the NBP day-ahead contract up 4.12p to 121p/therm.
Power Market
GB baseload contracts climbed higher on Thursday, tracking gains in UK gas. The front quarter gained £2/MWh to close at its highest price since late March, at £108.50/MWh, as the escalating U.S.-Iran conflict fed into NBP gas prices. Prompt prices were lower on the day, tracking a sharp wind generation recovery that swung from well below normal to above it, alongside solar running well above normal and firmer nuclear output. The day-ahead contract fell £4 to £117.50/MWh.
EUA prices continue to find support from firm gas and broader energy markets, but sentiment remains cautious ahead of the European Commission’s ETS reform package, due July 17th. The December-26 EUA contract settled unchanged at €79.04/tonne. H1 volumes in European emissions trading on EEX rose 11% year-on-year to 508.9 million tonnes of CO₂, driven primarily by a 72% expansion in the secondary emissions market.
Oil Market
Oil prices fell roughly 2% as inflation worries and broader economic concerns raised doubts about global demand, even with supply still tight due to a delayed reopening of the Strait of Hormuz amid the U.S.-Iran conflict. Front-month Brent crude dropped $1.72 to $76.30/bbl, pulling back from Wednesday’s three-week high. The pullback came despite Iranian forces striking U.S. military sites in the Gulf on Thursday, retaliating for U.S. strikes on Iran’s southern coast and eastern provinces, putting further pressure on a three-week-old ceasefire. Overshadowing the recent escalation in the Middle East and adding to demand concerns, minutes from the Fed’s June 16 to 17 meeting showed rising inflation worries among policymakers, raising the prospect of higher rates that could slow growth and dent oil demand. Meanwhile, China, the world’s second-largest economy, reported producer price inflation in June hit a four-year high.
Markets This Morning
European wholesale gas prices fell on Friday morning as more LNG tankers resumed transit through the Strait of Hormuz, despite renewed tensions. The NBP front month contract is down 3.51p at 117.32p/therm, while Winter-26 is down 3.16p at 119.15p/therm. Despite the re-escalation of tensions and this week’s attack on a Qatari LNG tanker, ship-tracking data showed more LNG tankers resuming transit through the strait in recent days. Japan’s transport minister said on Friday that 22 Japan-linked vessels have left the Gulf since Tuesday. Oil prices eased on Friday but remained on track for weekly gains as Middle East geopolitical risk kept supply concerns elevated. Front-month Brent last traded down 20 cents at $76.10/bbl.
