Energy Market Report - 01 September 2026
A renewed exchange of strikes between US and Iranian forces around the Strait of Hormuz over the bank holiday weekend has reset risk pricing across European energy, overwhelming a soft Friday session in which gas and power had both drifted lower. Crude, gas and forward power are all indicated sharply higher this morning, with the physical supply picture already tightening ahead of the geopolitical escalation.
Natural Gas
Gas eased into the Friday close on better wind forecasts and cooler weather, with NBP day-ahead settling 4.40 p/therm lower at 162.10 p/therm, October 26 at 164.82 p/therm and Winter 26 down 3.93 p/therm at 165.34 p/therm. Those losses have been more than erased this morning, with day-ahead indicated 11.60 p/therm higher after American forces struck rocket launchers on Larak Island in the Strait of Hormuz, the first such action since late July, and Iran retaliated against US bases in Jordan. The supply backdrop was already deteriorating. Norwegian nominations stood at 322.4 mcm/day on 28 August, but planned outages were set to climb from 40.14 mcm/day to 77.14 mcm/day within two days, and maintenance at Kollsnes has cut around 40 mcm/day, dragging Langeled deliveries to the UK down by 26 mcm/day. LNG sendout into Continental Europe fell roughly 19 per cent day on day while UK sendout held at 8 mcm/day, and European storage of roughly 64 to 65 per cent sits well below the same point in 2024 and 2025.
Electricity
UK power tracked gas lower on Friday, with Q4-26 baseload down £2.49 to £135.51/MWh and Winter 26 down £2.59 to £135.08/MWh, while day-ahead baseload settled at £130.50/MWh. The generation mix has shifted sharply in wind's favour: wind supplied 29.1 per cent of the GB mix last week against 19.6 per cent the week before, pushing gas-fired generation down from 34.1 per cent to 20.9 per cent as the high-pressure heat dome that suppressed output through August finally broke up. Overnight, wind led at 8.56 GW with nuclear at 4.95 GW and CCGT at just 2.41 GW. That relief may prove temporary, with UK nuclear availability expected to fall to around 3.6 GW during September. On the Continent, the French front-month contract reached €130.74/MWh on Monday, its highest on a rolling basis in nearly three years, as heat-related nuclear outage extensions compounded the gas move, while the German October contract firmed to €147.85/MWh.
Other Commodities
Brent M+1 settled down $1.60 at $88.10/bbl on Friday but has since risen toward $92/bbl on fears of wider Middle East supply disruption. API2 coal for 2027 firmed $0.71 to $129.71/tonne. Carbon rose modestly on both schemes, with EUA Dec 26 up €0.31 at €82.73/tonne and UK ETS Dec 26 up £0.39 at £59.39/tonne, which at prevailing exchange rates leaves UKAs at roughly an £11.53/tonne discount to the European contract. Sterling was steady at 1.1666 against the euro and 1.3534 against the dollar. Separately, the United States has secured access to around a fifth of Venezuela's oil reserves, though industry appetite for committing capital there remains cautious.