Energy Market Report - 01 July 2026
Renewed geopolitical risk drove wholesale gas and power higher on Tuesday and again into this morning, as a faltering US-Iran diplomatic process and thinner shipping through the Strait of Hormuz restored a risk premium across the curve. Crude, by contrast, stayed soft on comfortable supply, while carbon firmed on both sides of the Channel.
Natural Gas
UK and continental gas extended their advance for a third consecutive session, driven less by fundamentals than by a return of geopolitical premium after Tehran declined to meet US envoys and attacks resumed over the weekend. The NBP day-ahead settled at 105.80 p/therm, up 2.50 on the day, with the front-month around 106 p/therm this morning and the Dutch TTF day-ahead firming above €43.50/MWh. Supply remained comfortable and limited the gains: Norwegian nominations held near 338 mcm/day, total Gassco exit flows were reported at 345.8 mcm/day with around 87 mcm/day heading to Britain on stronger FLAGS and Langeled deliveries, and LNG sendout was steady at roughly 8 mcm/day. The bullish counterweight is structural, with EU storage close to a five-year low near 48.6 per cent full, a reported extension of Qatari force majeure into September, and Norwegian curtailments due to rise from around 27 to 45 mcm/day by 4 July.
Electricity
UK power diverged by tenor. The forward baseload curve tracked gas higher, the front-month firming to around £97.95/MWh and Winter 2026 near £99.60/MWh, as a collapse in wind to roughly 3.4 GW on Tuesday, and well under 1 GW this morning, pushed combined-cycle gas turbines to about 46 per cent of generation and lifted interconnector imports to around a fifth of supply. The prompt moved the other way: day-ahead baseload settled at £103.78/MWh, down £20.16, and fell further this morning as forecasts pointed to stronger wind and solar and gas-for-power demand around 11 mcm/day lower. Curve support came from a heavily derated nuclear fleet, with outages at Heysham, Sizewell B and Hartlepool, and from heat-related curtailments at French reactors that are limiting exports into Britain while German and Dutch day-ahead baseload trade near €151 and €149/MWh.
Other Commodities
Crude remained on the back foot despite the geopolitical backdrop, Brent settling near $72.95/bbl, down on both the day and around 5 per cent on the week, with WTI near $69.50/bbl and broadly flat this morning as talks made slow progress, a muted response that continues to point to ample seaborne supply. Coal firmed, the ARA CIF 2027 contract settling at $110.69/tonne, up $2.23, though slightly softer on the week. Carbon rose on both schemes, with EU Allowances for December 2026 at €80.16/tonne, up €1.38, and UK Allowances for the same delivery at £56.66/tonne, up £0.42, leaving the cross-border spread broadly stable and near-term pricing governed by residual thermal load and auction supply.