No clear price direction as fake news on US import tariffs causes market turmoil
Gas prices struggled to establish a clear direction at the NBP on Monday.
Sharp, sudden intraday swings were observed, with the Winter 25 front-season contract trading as low as 89.75p/therm (3.1p/kWh) before increasing by 14% to trade at 102.28p/therm (3.5p/kWh) just after 2:00pm BST.
Weakness in global financial markets continued to guide the wider energy complex lower during early trade. However, rumours of a tariff reversal/delay contributed to a strong correction across stock markets in the afternoon.
A tweet suggesting that Donald Trump’s financial advisor, Kevin Hassett, had said, “Trump is considering a 90-day pause in tariffs for all countries except China” during a Fox News interview reportedly caused Wall Street to surge by as much as $2.4 trillion within 15 minutes.
This, in turn, triggered a rally on the NBP and other global gas hubs, as a pause on tariffs may have signalled to markets that demand was to remain higher than previously thought. Shortly after the tweet was posted, the White House dismissed it as “fake news,” causing yet another rapid sell-off, though it was not as steep as the previous one.
Around the same time, European Commission President Ursula von der Leyen stated that the EU was ready to talk to the Trump administration regarding the imposition of 20% tariffs on most goods, as well as a specific 25% tariff on imports of steel, aluminium, and cars, which could affect up to a total of €380 billion of EU-made goods. The bloc also reiterated its willingness to offer “zero-for-zero” tariffs on industrial goods.
Signs that the EU is open to negotiating tariffs with the US may have quelled losses on stock indices and inadvertently offered underlying support to energy markets.
This morning, the NBP remains largely stable, with most seasonal contracts being offered at prices consistent with their previous settlements at time of writing.
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Price commentary courtesy of Crown Gas and Power 