Fridays expected signed peace deal helps drive down prices

The NBP sustained its downward trajectory on Tuesday, with the Winter 26 contract seemingly attempting to break below the next psychological level at 105p/therm.

The front-winter closed just above 105.1p/therm (3.6p/kWh), its lowest level since 20th April on easing tensions between the US and Iran.

A memorandum of understanding has reportedly been drafted (details remained unconfirmed) and it is expected to be signed in Switzerland on Friday.

Unseasonably high demand has been hammering GB storage levels over the past few days. Data from National Gas shows that British facilities currently hold only 2.5TWh, a several year low that is less than 8% of listed capacity.

British power prices edged lower on Tuesday, though they continue to do so more cautiously than gas counterparts.

Wind output has been significantly lower so far this week, accounting for 17.8% on Tuesday, with (CCGT) strong at 35.6% of the mix.

European carbon prices are actually higher than they were before the US-Iran deal was announced, and they continue to press higher this morning, supporting the cost of fossil fuel generation. Crude markets have seen the most substantial downside since the announcement.

According to data from ICE, the Brent Crude August 26 benchmark contract has lost 9.6% of its value since news of the deal took effect early on Monday.

Officials from both sides have issued conflicting comments about the future of shipping via the Strait of Hormuz.

US President Trump has insisted that the vital waterway will remain toll-free, as it was before the war, though the Iranian Foreign Ministry has said it intends to charge tolls for access, with the revenues being distributed to Iran and Oman- as under the UN Law of the Sea, it falls into the territorial waters of both countries.

While access to the Strait could technically become possible again as part of the memorandum of understanding, the passage is still thought to be mined and it could take weeks to clear for safe passage, and there remains a heavy military presence nearby; both factors are discouraging operators from traversing, what they view to be, a dangerous route.

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Price commentary courtesy of Crown Gas and Power