Gas Market
On Wednesday, UK gas markets experienced a slight pullback amid a tense global backdrop. The front-month NBP contract dipped by 1.65 pence, settling at 91.28 p/therm, retreating from an intra day high of 95.62p/therm. The decline followed reports that Qatari LNG exports have remained stable despite the recent attack on the South Pars field, a joint operation with Iran, which partially suspended production on Saturday due to a fire following missile strikes. Meanwhile on the prompt, the day-ahead contract edged up by 0.17 p to 93.70 p/therm, impacted in part by a drop in wind generation. Despite relatively balanced supply and demand fundamentals, the market remained supported by ongoing geopolitical tensions stemming from the Israel–Iran conflict and fears of LNG disruptions through the Strait of Hormuz. In addition, the European Commission’s proposal to ban Russian gas imports by 2027 continued to inject bullish sentiment into the market.
Power Market
GB power prices declined by market close on Wednesday, mirroring losses in the NBP gas market. The front-month baseload contract fell by £0.80 to settle at £82.00/MWh. However, day-ahead UK power prices rose by 4.86% to £91.85/MWh, driven by a sharp drop in forecast wind generation for Thursday, expected to reach just 2.5 GW, tightening supply and supporting short-term prices.
European carbon markets remained relatively stable after two consecutive days of losses. The Dec-2025 EUA contract rose slightly by €0.11 to €74.77/tonne, showing resilience despite mixed signals from geopolitical developments in the Middle East and fluctuating oil and gas prices.
Oil Market
Oil prices settled higher on Wednesday after a volatile trading session, as investors weighed the risk of supply disruptions stemming from the ongoing Iran-Israel conflict and the potential for direct U.S. involvement. Front month Brent crude rose by 25 cents to settle at $76.70 a barrel, recovering from an earlier 2% decline. Market uncertainty was heightened by comments from U.S. President Trump, who remarked, “I may do it. I may not do it. I mean, nobody knows what I’m going to do,” underscoring the unpredictable nature of the situation. Concerns remain that direct U.S. involvement could indicate an escalation of the conflict, increasing the threat to energy exports from the region through the strait of Hormuz and adding further upward pressure on prices.
Markets this morning
UK gas and power markets are trading higher across the curve, supported by a combination of geopolitical uncertainty, tightening supply conditions, and the anticipated onset of summer heat. Gains on the NBP are being fuelled by concerns over further escalation in the Middle East, with the U.S. reportedly moving closer to a potential strike on Iran as it repositions military assets in the region. While no major supply disruptions have occurred, the market remains on edge, reacting to risk factors such as QatarEnergy’s precautionary measures amid rising tensions. Near-curve NBP contracts are currently up by an average of 3.17p/therm, with geopolitical risk continuing to inject bullish momentum into the market
19 June 2025
