Energy Market Report - 05 May 2026
European energy markets opened the week sharply higher as a weekend escalation around the Strait of Hormuz reasserted Middle East risk premia across the complex. Gas, power and crude all firmed materially against Friday's softer settlements, with renewed LNG supply uncertainty from Qatar and a pronounced drop in UK wind generation amplifying the move.
Natural Gas
UK and continental gas prices gapped higher this morning following the bank holiday weekend, with the NBP front month indicating around 117 p/therm versus Friday's 112.10 settlement, a move of roughly 5 p/therm. TTF day-ahead settled at €45.18/MWh on Friday and is similarly firmer in early trade, with continental hubs broadly aligned. The driver is geopolitical: reports indicate the US sank seven Iranian fast boats in the Strait of Hormuz, UAE air defences engaged 15 Iranian missiles in their first intercept since the prior ceasefire, and QatarEnergy has extended its LNG force majeure through to mid-June, leaving the market without clarity on Qatari volume return. UK fundamentals also tightened, with system demand at 154.6 mcm/day, up nearly 6 mcm on the prior session, while UK storage sits at just 10 per cent - the lowest in Europe - leaving limited buffer. Norwegian flows are steady with Langeled at 27.4 mcm/day, but UK LNG send-out is unchanged at 12 mcm/day with no near-term arrivals scheduled into UK terminals.
Electricity
UK baseload power firmed in line with gas, with the front month indicating around £97/MWh in early trade, up roughly £4 on Friday's £93.20 close. The day-ahead baseload settled at £105.80/MWh on Friday, with the equivalent German baseload around €128.73/MWh. Fundamentals turned bullish over the weekend with UK wind generation falling more than 60 per cent day on day to around 3.5 GW, German wind dropping similarly to circa 3.4 GW, and solar output down approximately 26 per cent. Cooler than seasonal temperatures across northwest Europe are forecast through midweek, lifting gas-for-power requirements by an expected 10 mcm/day on the day-ahead. Nuclear availability is also constrained, with Heysham 1 unit 2 starting a 54-day planned outage today and further outages across the Heysham 2 and Sizewell B fleet scheduled through May.
Other Commodities
Brent crude surged towards $113-114/bbl in early trade, up roughly $1.50 day on day and around 5 per cent on the week as Hormuz disruption risk drove a sharp re-pricing of geopolitical premia. WTI similarly firmed to circa $106/bbl, up more than 10 per cent on the week. Coal also gained, with API2 Cal-27 at $121.15/tonne, up just over 1 per cent on Friday. EUA Dec-26 carbon settled at €73.94/tonne and is broadly steady, while UK ETS Dec-26 sits at £49.88/tonne with the EUA-UKA spread little changed. Asian JKM is trading at $17.20/MMBtu, retaining a modest premium over TTF and continuing to pull Atlantic basin LNG cargoes eastward, limiting near-term redirection into Europe. Sterling was little changed against the euro at 1.1544 with no notable FX moves to flag.