NBP prices held on to Tuesday’s sharp losses yesterday, with contracts largely trading flat after several days of volatility.

Gas Market

NBP prices held on to Tuesday’s sharp losses yesterday, with contracts largely trading flat after several days of volatility. As the U.S. brokered ceasefire between Israel and Iran appeared to be holding and geopolitical risk remained stable, the market was more settled. As it nears expiry, the July 25 contract shed just 0.22p by the close to end the session at 82.68p per therm. Movements across the Spot and prompt market were more mixed. Within day was supported by an undersupplied system and a weak presence of renewables in the power stack, increasing the contract by 0.70p day-on-day. In contrast, an expected significant fall in gas for power demand, driven by increased renewable generation levels, curbed upside on the Day ahead contract, which fell by 0.15p to close at 82.40p per therm.  

Power Market

All but the front month contract across the GB Baseload curve shed value on Wednesday, although losses were more muted than Tuesday’s sharp fall. Risk of French nuclear capacity curtailments from next week amid rising river temperatures supported the front week which also fed into the front month. The July-25 contract edged up by £0.67/MWh to end the session at £75.48/MWh. European carbon markets slumped on Wednesday as traders finalised their positions ahead of the expiry of June options and selling activity picked up. The EUA December 25 contract fell by €2.04 day-on-day to settle at €71.27 a tonne.  

Oil Market

Crude oil prices were stable on Wednesday following Tuesday’s slide as the ceasefire between Israel and Iran appeared to be holding. Preliminary military reports suggested that U.S. airstrikes did not destroy Iran’s nuclear capability but merely set it back a few months, which also eased the upside. Modest support meanwhile came from data that pointed to an increased likelihood that the U.S. Federal Reserve could soon cut interest rates. Lower interest rates typically spur economic growth and demand for oil. The front month Brent contract gained 54 cents day-on-day to close the session at $67.68 a barrel, down 11.7% week-on-week.  The WTI August contract increased by 55 cents to settle at $64.92 a barrel.  

Markets this morning

NBP near months have lost an average of 3.03p per therm so far this morning as geopolitical risk continues to stabilise. The front month contract last went through at 79.64p per therm, down 3.04p day-on-day. The GB system is currently oversupplied, while renewable power generation is 17.0% higher than yesterday, curbing upside on the Spot. Crude oil markets are stable, with the front month Brent contract shedding just 18 cents day-on-day so far. Market participants remain cautious as to the stability of the Iran-Israel ceasefire while shifting focus back on macroeconomics and oil balances.