Gas Market
NBP front-month gas broke its recent losing streak on Tuesday, rising by 2.10p to settle at 79.43p/therm. The contract had previously shed 23.09p from its multi-month high of 100.42p/therm on June 19, as fading Middle East risk premiums and a return to market fundamentals pressured prices. The rebound was supported by stronger gas-for-power demand across the UK and Europe, driven by lower wind generation and a heatwave boosting air conditioning use. Technical buying after last week’s losses also added upward momentum yesterday however the market continues to track EU storage regulation proposals and US-EU trade negotiations, adding additional directional uncertainty for traders. On the prompt, the day-ahead contract increased 1.5p to 79.50p/therm as total system demand for gas was 168.97mcm yesterday, well above the seasonal norm of 147.7mcm/day.
Power Market
GB baseload power contracts rose on Tuesday, supported by the rebound in gas prices. The front-month August contract gained £1.55, settling at £71.55/MWh. Both prompt and forward curve contracts increased amid technical buying after last week’s sharp declines, alongside a tighter supply outlook driven by increased cooling demand and lower wind generation boosting gas-for-power use.
European carbon prices also rebounded at the start of the new quarter, erasing Monday’s losses. The Dec-2025 EUA contract climbed €1.55, or 2.24%, to settle at €70.77/tonne. Prices were further lifted by the anticipation around the European Commission’s upcoming proposal for a 2040 climate target of a 90% reduction in emissions from 1990 levels.
Oil Market
Oil prices edged higher on Tuesday, supported by encouraging economic data from China showing expanding industrial activity, which supported demand prospects from the world’s second largest oil consumer. Brent crude for September delivery rose by 37 cents, or 0.6%, to settle at $67.11 a barrel. Prices have fluctuated in a range between $66.34 and $69.05 since June 25, as supply concerns in the Middle East subsided following a ceasefire between Iran and Israel. Gains have been capped by expectations that OPEC+ will increase output by 411,000 barrels per day in August. Meanwhile, investors remain cautious ahead of the upcoming U.S. tariff deadline on July 9, when rates are set to revert from a temporary 10% to levels previously announced by U.S. President Trump in April.
Markets this morning
Gas markets are trading higher this morning, supported by tightening fundamentals. Near-curve contracts are up by an average of 1.13p/therm while Winter-25 is up 1.66p at 93.10p/therm, with wind generation remaining well below seasonal norms at just 2.97 GW. While gas-for-power demand is strong, it is expected to ease slightly as temperatures moderate. In oil, front-month Brent crude has gained 47 cents to trade at $67.58/bbl. The move is supported by a weaker U.S. dollar, which is price positive, though gains are limited by an unexpected build in U.S. crude inventories of 680,000 barrels last week, a period when stockpiles typically decline due to summer driving season demand.
02 July 2025
