Energy Market Report - 02 June 2026
Escalating tensions across the Middle East drove a sharp rally in UK and European gas and power on Monday, with reduced Norwegian supply and weaker wind adding to the bid. Prices have softened again this morning as wind and solar forecasts improved, while the wider commodity complex firmed on Monday before crude eased overnight.
Natural Gas
Reports of stalled US to Iran talks and continued Israeli operations in Lebanon, together with renewed threats to regional shipping, pushed the NBP higher on Monday, with the day-ahead settling 10.36 p/therm up at 120.86 p/therm and the front-month at 119.09 p/therm. Tighter fundamentals reinforced the move, as Norwegian flows dipped toward 281 mcm/day on outages at Aasta Hansteen and Oseberg, LNG send-out into Europe fell around 40 per cent, and lower wind lifted gas-for-power demand. TTF and the German hub firmed in tandem to around 48 to 49 €/MWh. This morning the prompt has eased, with stronger wind and solar forecasts cutting the day-ahead gas-for-power call to around 18 mcm/day, the UK system opening some 11 mcm/day long and Aasta Hansteen back online to lift Norwegian nominations toward 290 mcm/day. Storage remains comfortable at just over 40 per cent full despite injections trailing last year by around 9 per cent, and the LNG arrival schedule into north-west Europe is heavy and led by US cargoes, with JKM at 18.17 $/MMBtu holding a moderate premium to European hubs.
Electricity
UK power followed gas higher on Monday, with day-ahead baseload settling 3.50 £/MWh up at 111.00 £/MWh, the front-month at 103.46 £/MWh and Winter 2026 at 103.19 £/MWh. A sharp drop in wind output lifted gas-fired generation, leaving CCGTs supplying close to a third of the GB mix, while a heavy slate of nuclear outages across Heysham, Torness, Sizewell B and Hartlepool limited firm capacity. This morning the prompt has reversed, with day-ahead baseload indicated down toward 96 to 97 £/MWh on improved wind and solar forecasts and a long system, and interconnectors importing from France and Belgium. On the Continent, German baseload outpaced its neighbours and Calendar 2027 reached its highest level since early April at around 95.80 €/MWh, while French forward power stayed well below UK and German levels on comparatively strong nuclear availability.
Other Commodities
Crude tracked the Middle East premium higher on Monday, with Brent up 3.18 per cent at 94.98 $/bbl and WTI up 5.49 per cent at 92.16 $/bbl, though both eased this morning and Brent remained lower on the week and well below its earlier conflict highs. Coal firmed in step, with ARA CIF Calendar 2027 up 3.55 $/tonne at 126.52 $/tonne. Carbon, by contrast, slipped against the rally, with the EUA December 2026 contract falling to 79.17 €/tonne and the UK ETS December 2026 contract dropping to 55.83 £/tonne, leaving UK Allowances at a wide discount to the EU benchmark. In LNG, Asian JKM held around 18.17 $/MMBtu and Henry Hub eased to 3.07 $/MMBtu, while sterling firmed slightly against the euro to 1.1562.