Energy Market Report - 02 September 2026
A rapid escalation between US and Iranian forces, now spanning strikes across four countries, drove the sharpest single-day gains in European energy markets in months. UK gas day-ahead rose by close to ten per cent, with power, crude and coal all following the move higher despite a generation backdrop that would ordinarily have capped prices.
Natural Gas
Gas rallied hard because supply and geopolitics deteriorated together. NBP day-ahead settled 15.90 p/therm higher at 178.00 p/therm, with October 26 up 13.47 p/therm at 178.29 p/therm and Winter 26 up 13.09 p/therm at 178.42 p/therm, while TTF day-ahead settled at €72.01/MWh, up roughly nine per cent. LNG inflows into Europe collapsed to around 200 mcm/day, roughly half the previous session's level, just as Asian spot LNG climbed above $25/MMBtu to its highest since March, raising the price Europe must pay to attract flexible cargoes. Norwegian exports held up at approximately 292 mcm/day with flows to the UK increasing to around 37 mcm/day, but that could not offset the LNG shortfall. The structural weight sits with storage: EU inventories reached 65.1 per cent full on 30 August, some twelve percentage points below last year and around 22.6 points below the five-year seasonal norm, and hitting the mandated 90 per cent by 1 November now requires average injections near 4,510 GWh/day against a current run rate around 3.9 TWh. Planned maintenance at Dvalin begins imminently and will cut a further 8 mcm/day through to 26 September.
Electricity
UK power followed gas higher despite wind running consistently above average, with output at 9.17 GW in the UK and 22.74 GW in Germany. October baseload settled at £137.72/MWh, up 6.45 per cent on the day and 7.18 per cent on the week in its first session as front-month after the bank holiday, while Q4-26 rose £8.22 to £143.73/MWh, Winter 26 £8.55 to £143.64/MWh and day-ahead baseload settled at £153.70/MWh. That a market can gain this much on a strong wind day confirms the move is coming from fuel and carbon costs rather than residual load. Intraday, system prices held between roughly £190/MWh and £200/MWh through most of the daylight hours before spiking to £240.00/MWh in the early evening. Continental markets moved further still, with German October up seven per cent at €151.32/MWh and the French front-month up 11.57 per cent week on week as record-low precipitation and above-normal temperatures continue to restrict hydro output.
Other Commodities
Brent M+1 surged $6.55 to $94.65/bbl, reaching six-week highs, after American forces resumed strikes on Iran and Tehran retaliated against US targets in Jordan, Kuwait, Iraq and Bahrain, with Washington signalling that further action is being held in reserve. API2 coal for 2027 gained $4.52 to $134.23/tonne. Carbon lagged the wider complex, with EUA Dec 26 up €0.61 at €83.34/tonne while UK ETS Dec 26 slipped £0.18 to £59.21/tonne, widening the UKA discount to the European contract to roughly £12.17/tonne. Asian spot LNG above $25/MMBtu marked the highest print since March. Sterling was steady at 1.1675 against the euro and eased to 1.3515 against the dollar.