The threat of 30% trade tariffs on EU exports to the U.S. was largely shrugged off by the gas markets on Monday

Gas Market

The threat of 30% trade tariffs on EU exports to the U.S. was largely shrugged off by the gas markets on Monday. The NBP curve opened firmer at the start of the week but gains for the front months were pared back to an average of 0.10p by the close.  Reports of higher temperatures boosting LNG demand in Asia prevented contracts dipping into negative territory save for the front month which settled at 85.25p per therm.  On the prompt, a similar trend played out after reports of an unplanned outage at Aasta Hansteen provided support in the morning, but this was quickly resolved. The early premium was unwound through the afternoon leaving the Spot and Day ahead products almost a half a penny down at the close. GB supplies remained comfortable on the day despite demand increasing to counter for lower wind generation.

Power Market

GB baseload futures settled mixed on Monday with early movement tracking NBP futures higher.  The front two months ended the session with modest declines, August, settled down at £75.60/MWh while the Winter-25 contract added £0.13/MWh to close at £86.80/MWh.  Baseload for the Day-ahead eased by 2.0% or £1.66/MWh on an expected improvement in wind generation. Renewable could make up over 45% of supplies on Tuesday. Carbon EUAs reversed an early selloff in response to the threat of higher trade tariffs on the EU from Donald Trump.  At the close, European allowances were marginally down with contracts for 2025 and 2026 settling at €70.39 and €72.22 per tonne.

Oil Market

The market weighed up possible sanctions on buyers of Russian oil yesterday and Brent fell by over a dollar a barrel.  Donald Trump has given Russia a 50-day deadline to resolve the war with Ukraine or face tougher sanctions. The American leader said he could impose trade tariffs up to 100% on Russia while also targeting buyers of Russian oil. The EU is also close to an agreement on a new set of sanctions for Russia with the oil price cap for Russian crude oil expected to be lowered.  The threat of higher trade tariffs on EU exports to the U.S. was largely shrugged off by the market. Brent for September delivery declined by $1.15 a barrel to $69.21 a barrel, while the U.S. benchmark, West Texas Intermediate for August settled at $66.98, down $1.47 a barrel.

Markets This Morning

Expectations that the U.S. administration is to ramp up sanctions on Russia has provided a lift to crude oil prices this morning.  The U.S. President is expected to make an announcement about Russia later today. Brent last traded at $70.70 a barrel which is an increase of 43 cents from Friday’s close.  In the gas markets, near futures for the NBP have traded higher this morning shrugging off the threat of 30% tariffs for the EU from the U.S. President. The front month, August, last exchanged 1.36p per therm higher at 86.63p.  The Winter-25 contract has traded at 97.21p, up 1.05p. There have been no trades posted on the prompt screen as yet, and GB gas demand remains above the seasonal norm, but the system is forecast 10mcm long today.