Energy Market Report - 03 August 2026
Diplomacy rather than weather set the tone into the new week, with US-Iran talks scheduled for this afternoon, reports of an emerging arrangement over the Strait of Hormuz, and Brent down 4.5 per cent this morning as a result. European gas and power both closed Friday firmer on the day but sharply lower on the week, while an OPEC+ decision to complete the rollback of its voluntary output cuts added to the bearish tone across the wider commodity complex.
Natural Gas
Prices at the front of the UK curve firmed into Friday's close, though the weekly direction was decisively lower as the risk premium built during the Middle East escalation continued to unwind. NBP day-ahead settled at 142.00 p/therm and the September contract at 144.28 p/therm, with Winter 26 at 143.31 p/therm, down 6.66 per cent on the week from a peak above 153 p/therm reached on 24 July. Summer 27 fell to 93.39 p/therm and Calendar 27 to 104.72 p/therm. What keeps the winter supported is inventory rather than flows: Norwegian exit nominations reached 329.2 mcm/day on Friday, comfortably above the July average despite maintenance clipping around 28 mcm/day, but European LNG arrivals totalled just 8.91 bcm in July, some 28 per cent below the same month last year, and EU storage stood at 57.1 per cent full at the start of August, roughly 11.7 percentage points behind 2025 with injection rates about 20 per cent slower. On the Continent, TTF spot settled at €58.36/MWh with THE at €58.59/MWh. This morning the UK system opened long, gas-for-power demand is forecast 7 mcm/day lower, and prices dipped at the open before recovering to trade broadly in line with Friday's close.
Electricity
UK power delivered two contradictory signals. Friday's day-ahead baseload settled £23.98 lower at £108.19/MWh with the peak product below it at £81.27/MWh, an inversion caused by strong solar output displacing gas-fired generation through the middle of Monday, and system prices turned negative on Sunday afternoon at minus £6.49/MWh. The day-ahead has since rebounded to £128.50/MWh this morning, more than £20/MWh above Friday's settlement, as the market looks past the current renewable surge. The forward curve moved very little, with September baseload at £120.30/MWh, Q4-26 at £124.07/MWh and Winter 26 at £121.76/MWh, the latter down 5.06 per cent on the week, before falling away to £83.00/MWh for Summer 27. Supply is the near-term watch item: UK nuclear availability thins materially through August with planned outages at Hartlepool from 7 August and at Heysham and Torness later in the month, while on the Continent two Swiss reactors have had their restart extended because of high river temperatures and the French fleet remains under heat pressure. Temperatures in Germany and the Netherlands are forecast 8 to 10°C above average this week, lifting cooling demand, though wind and solar are expected to strengthen from Wednesday.
Other Commodities
Brent front-month settled 1.22 per cent higher at $90.12/bbl on Friday and WTI at $84.67/bbl, but both were down heavily on the week and crude has fallen further this morning, with Brent trading at $83.70/bbl after the US cancelled planned strikes on Iran ahead of today's talks. OPEC+ agreed at the weekend to lift September quotas by around 188,000 bpd, completing the rollback of its 1.65 million bpd voluntary cut, while on the supply-risk side Ukrainian drones struck three refineries in Bashkortostan on 1 August and Turkey and Iraq signed a one-year extension to the Kirkuk-Ceyhan pipeline deal, an export route that bypasses the Strait of Hormuz. Coal was modestly firmer, with API2 ARA Cal 27 at $124.91/tonne and effectively unchanged on the week. Carbon was static in both schemes, with EUA Dec 26 at €81.26/tonne and UK ETS Dec 26 at £59.09/tonne, leaving the UK allowance around €12/tonne below its EU counterpart. In global gas benchmarks, JKM front-month held at $21.45/MMBtu while north west European September cargoes fell to $19.70/MMBtu and Henry Hub September eased to $2.75/MMBtu. Sterling closed firmer at 1.3480 against the dollar and 1.1686 against the euro.