Prices drop further amid a renewed hope for a ceasefire in the Middle East

Renewed hope for an end to the US-Iran conflict gave way to the largest losses at the NBP in over two months on Monday.

The Winter 26 front-season contract had shed a massive 9% by the end of the day, fuelled by diminishing risk premiums following news of a US-Iran peace deal.

Both the US and Iran acknowledged that an agreement had been reached to end the war that began in late February.

Though details remain sparse and no deal has been signed in person, rhetoric from both sides seems far more positive than in recent weeks and President Trump has signalled that a more formal, memorandum of understanding could be signed in Switzerland on Friday.

The market has held onto yesterday’s significant losses so far this morning, with key contracts trading very much in line with their previous settlements, at time of writing.

Baseload power prices were also caught in yesterday’s bearish momentum, thanks to renewed US-Iran peace hopes, though they ultimately held relatively steady compared to the gas market and declined to a lesser extent.

This softening across electricity contracts was guided lower by a broader sell-off across the wider energy complex.

Given that gas-fired generation heavily influences the marginal cost of British electricity, the massive 9% plunge in NBP futures enhanced bearish sentiment at the front-end.

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Price commentary courtesy of Crown Gas and Power