Wholesale energy markets sold off on Tuesday as reports of mediation between Washington and Tehran prompted traders to unwind part of the geopolitical premium accumulated through October, pulling UK and continental gas, power and crude lower together. The move has reversed this morning, with gas and oil recovering their losses after the diplomatic optimism faded and planned maintenance in Norway reduced export nominations.
Natural Gas
Gas prices fell across the curve on Tuesday on sentiment rather than fundamentals, with the NBP front-month down 8.10p to 209.36 p/therm after a 17p intraday range and the day-ahead settling 6.05p lower at 210.00 p/therm. Dutch TTF day-ahead fell €1.60 to €86.95/MWh, with German THE at €87.50/MWh and French PEG at €86.00/MWh. The physical picture was steady through the session: Norwegian Continental Shelf output was nominated at 341.6 mcm/day, around 1 per cent higher on the day, with roughly 89.1 mcm/day heading to the UK against system demand of 160 mcm/day, and LNG sendout from Isle of Grain and South Hook was unchanged. EU storage is 74.62 per cent full in aggregate, but the dispersion is notable, with France at 87.54 per cent against Germany at 61.19 per cent and the Netherlands at 64.65 per cent, and injection rates slowing as temperatures drop. The tone has firmed this morning, with the front-month indicated above 218 p/therm as Gassco exit nominations fell to 324.9 mcm/day on Troll maintenance and UK-bound flows dropped by around 7 mcm/day, while the latest 46-day outlook points to below-normal temperatures through the forecast period.
Electricity
Power followed gas down but with less conviction, held up by impaired nuclear availability and a downward revision to wind forecasts. The UK day-ahead baseload settled £4.36 lower at £173.08/MWh with peak at £184.45/MWh, while the November baseload contract closed at £166.00/MWh after a £10 range, and further out Q1-27 fell £5.51 to £170.86/MWh and Calendar 2027 eased around 2 per cent to £136.25/MWh. Roughly 1.1 GW of nuclear capacity is offline across Heysham 1 and Heysham 2, leaving CCGT as the marginal price-setter for most of the day, and the intraday shape on Tuesday was correspondingly wide: the system ran long enough through the early afternoon for the sell price to print at zero, before swinging short into the evening with prices of £204 to £211/MWh across the 17:00 to 19:00 periods and a high of £235/MWh shortly before 21:00. Continental markets were softer in sympathy, with German spot at €211.94/MWh and the German front-month closing at €190.80/MWh, while the French front-year ended a ten-session advance as heavy rainfall in the south and south-west improved the hydro outlook.
Other Commodities
Brent crude settled $0.76 lower at $108.79/bbl on Tuesday after Pakistan’s army chief met Iranian officials in Tehran, only for the contract to climb back above $110/bbl this morning once a diplomat involved dismissed reports that an agreement was imminent, leaving it up nearly 3 per cent on the week. API2 ARA coal for Cal-27 eased $3.10 to $146.63/tonne, with Cal-28 at $136.79/tonne. Carbon moved against the broader trend, with EUA Dec-26 up €0.25 to €85.65 per tonne and UK ETS Dec-26 up £0.25 to £63.43 per tonne, equivalent to €75.49, leaving UKAs at roughly a €10 discount to EUAs and marginally narrowing that gap. In global LNG, Asian JKM settled $0.46 lower at $29.55/MMBtu and north-west European LNG at $26.54/MMBtu, while Henry Hub front-month at $2.96/MMBtu is down close to 10 per cent on the week, keeping the Atlantic arbitrage wide open. Sterling firmed on both crosses, up 0.57 per cent against the dollar at 1.3378 and a quarter of a cent against the euro at 1.1901.