Price movement reflects uncertainty around Middle East transit negotiations

Gas prices traded largely flat at the NBP on Friday as market participants evaluated conflicting signals surrounding Middle East transit negotiations.

While headlines indicating that an Iran–Oman framework to reopen the Strait of Hormuz was in its final stages offered temporary market reassurance, downside pressure remained limited.

Broader bullish risks persisted as traders weighed US pushback against key elements of the proposed terms, specifically Tehran’s intention to levy transit fees and impose strict financial penalties on non-compliant vessels.

Given the operational complexity, US sanctions friction, and uncertainty over payment mechanisms, market participants opted to maintain risk premium across near-curve contracts pending further finalised details.

Baseload power prices saw calming volatility at the end of last week, reflecting similar movements in the gas and crude oil markets.

A notable surge in renewable generation supported this shift, with Elexon data showing wind turbine output averaged 8.9GW Monday to Sunday, a 49.5% increase compared to the prior week.

Meanwhile, wellabove-average temperatures across parts of Europe have led to lower river levels, directly threatening French nuclear output.

While cooling demand is not as significant as in other European countries, lower regional flexibility remains an underlying source of support for the British market.

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Price commentary courtesy of Crown Gas and Power