US-Iran peace talks deadlock creates market uncertainty

Market movement appeared to be driven largely by technicalities on Friday, with the US-Iran deadlock continuing to serve as a major source of underlying price support and wider market risk premium.

An initial break below the Winter 26 psychological level at 120p/therm (4.1p/kWh) garnered a further push toward 117p/therm, though the bears seemingly lost momentum, sparking a swift afternoon recovery.

The front-season contract (W26) ultimately closed just below 120p, down 1.8% from Thursday’s settlement.

Falling system demand amid unseasonably high temperatures, alongside easing Norwegian production constraints helped to cool market sentiment ahead of the bank holiday and they continue to exert downward pressure this morning.

A relatively calm session for baseload power prices, which displayed less intraday volatility than gas counterparts on Friday.

Forecasts of warm and sunny conditions over the bank holiday helped to steady the near-curve.

During heatwaves, UK power demand does not typically spike to the same extent as is seen in mainland Europe due to the far less prevalent utilisation of cooling tech such as air conditioning.

This, alongside strong solar generation that was comparable to wind and gas, placed the British grid in a comfortable position over the bank holiday weekend.

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Price commentary courtesy of Crown Gas and Power