Gas prices collapse to new multi-month lows
Gas prices collapsed to multi-month lows at the NBP on Thursday, hammered down by Ukraine peace hopes and speculation about the potential impacts of US tariffs.
The Summer 25 front-season contract posted its biggest daily loss in over 3 weeks, falling around 8p/therm (0.27p/kWh) to its lowest settlement since 18th October 2024 in what appeared to be a determined attempt to breach the next key psychological level at 90p/therm (3.1p/therm), although it ultimately failed to do so (data from ICE).
European gas hubs faced pressure from news that the European Union will delay the release of its long-anticipated plans to phase out all Russian energy imports.
Amidst rumours that the US is considering the restart of Ukrainian gas transit and Nord Stream 2 flows as part of negotiations with Russia, market participants may have anticipated a potential boost to supplies that had previously seemed unlikely.
In the realm of diplomatic relations, the prospect of US tariffs on key EU industries has raised concerns about the bloc’s near-term growth. The proposed tariffs could curb economic activity across countries within the single market, potentially reducing gas demand due to a decline in industry and manufacturing, both of which are gas-intensive sectors.
In other news, the US and Ukraine have confirmed that delegations from the two countries will meet in Saudi Arabia next week in order to revisit a hypothetical peace deal with Russia, which invaded Ukraine in February 2022.
This development comes after talks fell apart between Presidents Trump and Zelensky at the White House last week, cutting the duration and scope of the meeting unexpectedly short.
The NBP appears to have rebounded this morning following yesterday’s steep losses, with both the front-summer and front-winter contracts each now being offered more than circa 4p/therm (0.14p/kWh) above their previous settlements, at time of writing.
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Price commentary courtesy of Crown Gas and Power 