Gas and Oil Ease as Markets Eye Trump’s Russia Deadline

Gas Market

NBP gas prices eased on Tuesday, with contracts continuing to trade within the 80–85p/therm range seen since the Iran-Israel ceasefire in late June. The front-month August contract fell by 2.93p to 82.32p/therm as the forward curve remains sensitive to geopolitical developments, with markets closely monitoring U.S. President Trump’s proposed sanctions on Russian. A comfortable supply outlook for the UK gas system added to the weakness in the prompt market, pushing the Day-Ahead price down by 1.5p to 81.7p/therm. The UK has received two LNG cargoes so far this month, with an additional two deliveries declared for arrival on the 21st and 28th of July. If these deliveries proceed as scheduled, total LNG imports in July would reach 294,000 tonnes, a significant increase from 73,000 tonnes in the same month last year and up from 216,000 tonnes in June.

Power Market

GB baseload power contracts had a mixed day on Tuesday, with losses less pronounced than those seen in the NBP gas market. The front-month contract declined by 2.2%, closely following its corresponding gas movement. However, on the prompt, prices found support from a 0.6GW downward revision in wind generation forecasts for the rest of the week. As a result, the Day-Ahead contract rose by 6.5% to £85.35/MW. The benchmark 2025 EUA gained €1.03 to settle at €71.42/tonne. European carbon allowances were relatively stable for most of the session before a late burst of aggressive buying pushed prices to a six-day high, further decoupling from falling natural gas prices.

Oil Market

Oil prices edged lower on Tuesday, easing by less than 1% after initial gains. Front-month Brent crude settled 50 cents lower, or down 0.7%, at $68.71 a barrel. Prices had risen earlier in the session amid fears of potential U.S. sanctions on Russian oil exports. However, sentiment shifted after U.S. President Donald Trump announced a 50-day deadline for Russia to end the war in Ukraine, reducing the risk of immediate supply disruptions. The extended timeline also raised hopes that secondary sanctions targeting major Russian crude buyers, including China, India, and Turkey, could ultimately be avoided. In the event that a ceasefire is not achieved within the next 50 days and the 100% secondary tariffs were implemented, these countries would need to weigh the benefits of buying discounted Russian crude oil against the cost of their exports to the U.S, drastically impacting the outlook for the oil market.

Markets This Morning

Energy prices have traded within a tight range so far this morning, with near-curve gas contracts up an average of 0.47p/therm. The UK gas system opened slightly short following an unplanned outage at Nyhamna, which has reduced imports by 8 mcm/day. The Within-Day contract last traded up by 2.15p/therm on the back of this disruption, and further support could emerge if the outage is extended. Brent crude opened 36 cents higher but later reversed, falling to $68.42/bbl, marking a 29-cent loss on the session.