The U.S. tariff talks pressured crude oil prices on Thursday as Brent settled 31 cents down at $68.80 a barrel

Gas Market

The NBP curve settled with a modest loss on Thursday as the front Winter contract declined by 0.23p per therm to reduce the gain for the last four days to just over a penny.  The sideways movement reflected the market’s fundamentals as demand eased during the day with increased power generated from wind.  Geopolitical risk premium added in June when Israel escalated the war in the region has been unwound and natural gas futures have settled back at levels seen before the escalation. Forecasts for temperatures to remain well above the norm next week could impact cooling for the French nuclear fleet and this was reflected in prompt prices on the continent.  The Day ahead for the TTF rose by 4.0% yesterday while it was down 0.4% on the NBP.  The price differential could encourage more exports from the UK through the interconnectors to Zeebrugge and Balzgand.

Power Market

GB baseload futures tracked movement on the NBP curve yesterday but held on to gains late in the afternoon as higher carbon prevented losses. The front month, August, settled at £73.00/MWh, posting an increase of £0.25/MWh while the Winter-25 baseload futures contract gained £0.33/MWh to close at £84.18/MWh. Forecasts for wind generation to increase on Friday weighed on the prompt as the Day ahead product eased by £11.42/MWh. An increase in coal futures supported European power prices yesterday after reports that low river levels in Germany were hampering barge loadings. Carbon EUA contracts for 2025 and 2026 added 0.9% or 64 cent per tonne to close at €72.23 and €73.10 respectively.

Oil Market

The U.S. tariff talks pressured crude oil prices on Thursday as the global benchmark settled 31 cents down at $68.80 a barrel. President Trump paused tariffs until 9-July and there are concerns that if no deals are done with Europe, Japan among others, higher tariffs will be applied which will slow crude oil demand. This comes at a time when OPEC+ are expected to announce an increase in production for August. The group have agreed to unwind voluntary production cuts by increasing output by 411,000 barrels per day each month and are due to meet at the weekend to finalise quotas for members.  More bearish news for the market came from reports in China showing service activity expanded in June at the slowest rate in nine-months.

Markets this morning

Crude oil prices are down this morning following reports that Iran has reaffirmed commitment to the nuclear non-proliferation treaty.  U.S. reps are expected to meet next week with Iranian leaders to re-engage nuclear discussions.  Brent is down 85 cents to $67.95 a barrel, however, the Independence Day holiday will limit trading in the U.S. Closer to home, wholesale natural gas prices opened higher this morning but most of the early gains have been reversed with near months hovering around last night’s close. August last traded at 79.97p per therm while the Winter contract exchanged at 92.75p.  On the prompt there has been very little action while the GB gas system is showing a healthy surplus against todays demand of 140mcm.