Europe: Oil and gas prices fall in early May as Iran–US deal expectations weigh on markets while carbon prices remain firm

During the first week of May, Brent crude oil futures for the ICE Front Month contract reached their weekly peak settlement price of $114.44/bbl on Monday, May 4, before entering a downward correction throughout the rest of the week. Prices declined steadily, reaching a weekly low of $100.06/bbl on Thursday, May 7, before closing the week slightly higher at $101.29/bbl on Friday, May 8. Despite the late rebound, this level was still 6.4% lower than the previous Friday, according to AleaSoft Energy Forecasting data.

Price movements during the week reflected a mix of geopolitical and supply expectations. While escalating geopolitical tensions provided intermittent upward pressure, the market was largely dominated by expectations of a potential United States–Iran agreement, which contributed to a broader bearish sentiment and pushed prices downward.

In the European gas market, TTF gas futures for the ICE Front Month contract followed a similar trajectory. Prices peaked at €48.14/MWh on Monday, May 4, before declining to a weekly minimum of €43.56/MWh on Thursday, May 7. A slight recovery followed, with prices reaching €44.14/MWh on Friday, May 8, although this still represented a 3.5% decline compared to the previous week’s close.

The downward pressure on gas prices was also supported by expectations of a possible US–Iran agreement, which could ease global supply concerns and potentially reopen key shipping routes, including the Strait of Hormuz, improving market sentiment around future LNG flows.

Meanwhile, CO₂ emission allowance futures in the EEX market (December 2026 contract) showed a different pattern. Prices started the week at their minimum level of €73.06/t on May 4, before moving upward during the following sessions. The weekly peak was recorded on May 6 at €76.07/t, with prices remaining above €75/t for most of the week. By Friday, May 8, the settlement price stood at €75.20/t, which was still 1.9% higher than the previous week’s closing level.

Overall, energy commodity markets during the first week of May reflected a mixed macro environment, where expectations of geopolitical de-escalation weighed on oil and gas prices, while carbon markets remained relatively firm due to continued structural pressure from EU emissions policy, AleaSoft reports.

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