Gas Market
Reports of attacks on shipping in the Strait of Hormuz sent natural gas prices higher on Tuesday as fears that the hostilities could escalate drove risk premium into the near curve for the NBP. The front month, August opened almost 4.00p higher than Monday’s close and gains were extended through the session as August settled at 110.75p, per therm, up 6.14p day-on-day. Significant gains were recorded on contracts covering the winter too as the front season closed 5.74p higher at 114.76p. Reports came late on Monday of a Qatari LNG tanker being stuck by Iranian missiles as it passed through the Strait of Hormuz. Iran’s Revolutionary Guards are believed to have fired missiles at other commercial ships later into the night. With the peace talks suspended, any further escalation is likely to stall the progress of shipping transiting the channel and constrain the ramp up at Qatar’s Ras Laffan gas complex.
Power Market
Yesterday’s firmer opening of the gas markets fed into the baseload power curve and continued to provide support for the rest of the day. Near months increased by an average of 3.0% or £2.90/MWh while the front season, Winter-26 was assessed £3.75/MWh higher at the close. Weaker carbon prices countered support for the longer curve and contracts into 2028 settled slightly lower. Both EUAs and UKAs ended the session down on Tuesday but trading was light ahead of next week’s review.
The EU Commission is to reveal its market reform proposal at the end of next week. European allowances fell by almost 2.0% or €1.67 per tonne yesterday while UKAs shed £0.88/tonne. Baseload for the Day ahead increased on the back of low wind forecast for Wednesday while the current warm spell is likely to increase cooling demand.
Oil Market
The attacks on shipping passing through the Strait of Hormuz pushed crude oil prices higher yesterday as fears rose of an escalation of the conflict in the Middle East. Iran’s Revolutionary Guards are believed to have fired missiles at commercial ships on Monday night, and it was feared that the U.S. would retaliate and movement of vessels through the waterway could grind to a halt again. Brent for September delivery settled 3.0% or $2.17 a barrel up at $74.16 a barrel. The U.S. benchmark, West Texas Intermediate, added $1.89 to close at $70.44 a barrel for August. Crude oil prices moved higher after market settlement and late in the evening after reports of U.S. strikes on over 80 Iranian targets including air defence systems. Tehran claimed the attacks as a violation of the ceasefire and launched missiles at U.S. military sites in Bahrain and Kuwait.
Markets this morning
Gas and oil prices have traded higher this morning following the escalation of hostilities in the Middle East overnight. Tehran has claimed the attacks by Washington as a violation of the ceasefire and launched missiles at U.S. military sites in Bahrain and Kuwait. Sanctions on the sale of Iranian oil have been reimposed, while President Trump declared the ceasefire with Iran is over at the NATO summit in Ankara this morning. Since those comments, both gas and crude oil prices have extended the earlier gains. The front month for the NBP curve, is 5.95p per therm up at 116.70p and the Winter is showing a similar gain having last exchanged at 120.50p. The September contract for Brent is 6.2% or $4.58 a barrel higher at $78.74. Carbon EUAs have traded sideways this morning.
