Geopolitical headlines pulled in both directions on Tuesday, with reported attacks on Saudi pipeline infrastructure and renewed Strait of Hormuz shipping risk set against signals of a softer US posture towards Iran, leaving crude lower on the day but firmer this morning. European gas rebounded from a multi-session selloff as cooler weather models returned, while UK power split between a sharply weaker prompt and a firmer forward curve.
Natural Gas
Gas rose on weather risk rather than any tightening in the physical balance. UK NBP day-ahead settled at 212.60 p/therm, up 7.80 p/therm, with December 26 at 211.29 p/therm and TTF December 26 at €84.73/MWh after the Dutch benchmark tested the €80/MWh area in early trading and recovered towards €85/MWh by the close. The driver was a cooler run for the back half of November, with the latest guidance pointing to a steep temperature decline over the weekend. Supply remains comfortable: UKCS production rose to 116.10 mcm/day, Vesterled and Flags added 9.00 mcm/day to 50.00 mcm/day, and Gassco exit nominations stood at 332.1 mcm/day despite a short unplanned outage at Troll curtailing 5.1 mcm/day that is expected to clear within a day. LNG sendout is scheduled at 53 mcm/day and the north-west European arrivals schedule is dominated by US-origin cargoes, helped by the near absence of any Asian premium, with JKM at $28.13/MMBtu barely above the north-west European marker. For all Tuesday’s gain, the week-on-week picture remains firmly negative, with Q1 27 down close to 7 per cent, and the curve now shows Summer 27 trading above Winter 27, an unusual shape that points to competition for injection volume next year rather than winter scarcity.
Electricity
UK power prices for immediate delivery fell back hard as the system recovered from a tight Monday. Day-ahead baseload settled £25.29/MWh lower at £221.38/MWh, with peak at £260.76/MWh, and the market is currently offering tomorrow’s baseload at £176.25/MWh as wind generation recovers to around 6.30 GW and gas-for-power demand is forecast to fall to 43 mcm/day. Monday had been considerably tighter, with wind down to under 4 per cent of the generation mix, gas-fired plant supplying more than 64 per cent, and NESO issuing an Electricity Margin Notice for the morning window, which drove a half-hourly system price range on Tuesday from £146.21/MWh overnight to £376.28/MWh in the morning ramp. The forward curve moved the other way, tracking gas: December 26 baseload gained £6.57/MWh to £174.05/MWh, January 27 reached £185.47/MWh and Q1 27 £173.95/MWh, while Summer 27 and Winter 27 both edged lower around £118 to £120/MWh. Nuclear availability is the persistent constraint, with two unplanned outages and one planned outage across the Heysham units and Torness 2 scheduled down from 27 November. On the Continent, German day-ahead has fallen back to around €205/MWh from above €300/MWh, easing the interconnector pull on UK evening peaks for now, though wind is forecast to drop below 4 GW by Sunday just as temperatures fall.
Other Commodities
Brent M+1 settled at $91.49/bbl, down $1.08, with WTI at $86.04/bbl, leaving both benchmarks more than 10 per cent lower on the week as the Iran de-escalation narrative took hold, though prices have firmed this morning on renewed Hormuz shipping concerns and the reported strike on Saudi Arabia’s East-West pipeline. Coal was marginally firmer, with API2 ARA Calendar 27 up $0.51 to $124.51 per tonne and Calendar 28 at $113.60 per tonne, both still down close to 9 per cent over seven days. Carbon rose in both schemes but lagged the wider complex: EUA December 26 settled at €88.06 per tonne and UK ETS December 26 at £66.19 per tonne, equivalent to €79.23, leaving the UK allowance at a discount of roughly €8.83 per tonne to its European counterpart, marginally narrower on the day, with both markets down around 2 per cent on the week. On the LNG benchmarks, JKM reached $28.13/MMBtu and north-west European LNG for December $27.90/MMBtu, while Henry Hub December 26 at $3.30/MMBtu is the only major benchmark higher on the week, up nearly 14 per cent. In FX, sterling fell 0.74 per cent against the dollar to 1.3341 while holding broadly flat against the euro at 1.1970.