Energy Market Report - 04 August 2026
Energy markets spent Monday pricing out the risk of a wider Middle East conflict, only to reverse course this morning after Iran denied that talks with Washington were under way and an LNG carrier was struck transiting the Strait of Hormuz. Beneath the geopolitics, European gas storage remains the weakest for the time of year in close to two decades, while UK power at the prompt continues to be dictated almost entirely by how much wind and solar the system receives on the day.
Natural Gas
Gas prices fell across the board on Monday as traders unwound war premium on reports that a peace deal was close. NBP day-ahead settled at 141.00 p/therm, down 1.00 p, TTF day-ahead was assessed at €57.59/MWh, and the curve gave up more ground than the prompt, with Winter 26 down 2.71 p to 140.60 p/therm after an attempt to break below 138 p/therm failed to hold. Fundamentals had supported the move: LNG deliveries into Europe were nominated at roughly 270 mcm/day, more than double the previous day, and EU storage recorded a net injection of around 3.0 TWh on the 1 August gas day. This morning the direction has reversed sharply, with Winter 26 offered around 147 p/therm, after maintenance at Gullfaks cut Norwegian exit nominations to 318.8 mcm/day and reduced Langeled deliveries to the UK by 11 mcm/day. The structural concern has not moved: EU inventories stand at 57.43 per cent, roughly 11.7 percentage points below the same point last year, and current injection rates point to only about 66 per cent by the end of October.
Electricity
UK power moved in two directions at once on Monday. Forward contracts followed gas and carbon lower, with the front month easing to £119.63/MWh and Winter 26 to £119.80/MWh, while the day-ahead settled £20.31 higher at £128.50/MWh because renewable output was forecast to stay below par into Tuesday. Peak settled at £120.52/MWh, below baseload, reflecting how heavily midday solar is now suppressing daytime prices relative to the overnight and evening blocks. Wind has since strengthened across both the UK and Germany, cutting gas-for-power demand by a forecast 14 mcm/day and pulling the day-ahead down to £88.84/MWh, against €110.52/MWh in Germany and €98.83/MWh in France. The relief is unlikely to last: wind is expected to fall back below seasonal norms, heat returns to central and western Europe next week, and the nuclear stack thins from Friday with Hartlepool 2 off for 16 days and further outages at Heysham 1 and Torness later in August. Outages across the French and Swiss fleets persist, with river temperatures continuing to constrain cooling and curtailment risk supporting continental forward power.
Other Commodities
Brent M+1 settled at $83.77/bbl on Monday, down 7.05 per cent, with WTI down 5.11 per cent to $80.34/bbl, before both retraced this morning and Brent pushed back above $85/bbl on the Hormuz strike and Iran's denial of talks. API2 ARA coal fell further than gas, with Cal-27 down 2.22 per cent to $122.14/tonne and Cal-28 and Cal-29 each down around 3.5 per cent to $115.51 and $115.67/tonne. Carbon eased on both schemes, EUA Dec 26 slipping 0.49 per cent to €80.86/tonne and UK ETS Dec 26 down £0.31 to £58.78/tonne, leaving the UK allowance roughly €12/tonne below its European equivalent at prevailing exchange rates. In global LNG benchmarks, JKM M+1 fell $0.89 to $20.55/MMBtu against European spot at $19.49/MMBtu, meaning Europe is attracting flexible cargoes by only a narrow margin, while Henry Hub spot firmed to $2.81/MMBtu. Sterling was marginally weaker at 1.1678 against the euro and 1.3428 against the dollar.