Energy Market Report - 06 May 2026
European gas and power markets opened materially lower on Wednesday following confirmation from Washington that the offensive phase of the Iran conflict is over and that Operation Freedom, the US naval escort programme through the Strait of Hormuz, has been paused. The development unwound part of the geopolitical risk premium built into recent sessions and pushed Brent sharply lower, dragging the wider complex with it.
Natural Gas
NBP and TTF opened lower across the strip on the Hormuz news, with NBP front month indicated at 111.80 p/therm into the morning, down roughly 3 p/therm from Tuesday's 115.02 p/therm settlement, and TTF front month easing to 45.75 €/MWh. The UK system ran 4 mcm short at 7am with demand around 177 mcm/day - 7 mcm above seasonal norm - keeping the prompt physically tight. Supply weakened this morning: Langeled deliveries fell to around 22 mcm/day after a downward adjustment, planned maintenance at Easington Langeled capped capacity at 35 mcm/day, and a half-day outage at St Fergus reduced receipts to 2 mcm/day. UKCS production fell to 83.90 mcm/day from 89.30. Pan-European storage stands at around 34 per cent full, roughly 7 per cent below the same point last year, with UK fills uneven (Hill Top at 79 per cent, Isle of Grain and South Hook each at 82 per cent, but Hornsea at 18 per cent and Humbly Grove just 5 per cent). LNG remains a meaningful counterweight, with ten cargoes scheduled into north-west European terminals through to 9 May, predominantly from the United States.
Electricity
UK baseload front month opened at 94.00 £/MWh, down 2.45 £/MWh on the day, with power's softer move reflecting bullish weather and renewable fundamentals offsetting the gas decline. Day-ahead baseload settled at 109.26 £/MWh on Tuesday after a 3.46 £/MWh rise, lifted by wind generation averaging just 4.9 GW (15.5 per cent of the mix) and broader energy complex strength. Temperatures are forecast to drop to around 2°C below seasonal norm on Thursday before recovering above norm into the weekend, while wind is currently running about 1 m/s below seasonal norm with forecasts oscillating around that level until late this weekend. An unplanned outage at Hartlepool 1 has further tightened nuclear availability, adding to existing planned outages at Heysham 1-1 (130 days from 8 April), Heysham 2-8 and Torness-1, with Sizewell B-1 and B-2 due offline later in May. UK Win-26 settled at 99.73 £/MWh and Cal-27 at 82.93 £/MWh on Tuesday, both easing in the morning session but holding well above year-ago levels.
Other Commodities
Brent crude fell sharply on the Iran development, with the M+1 contract settling at 109.87 $/bbl on Tuesday (down 3.99 per cent) before extending the move to around 103 $/bbl this morning, a further roughly 6 per cent decline from settlement. WTI tracked similarly, settling at 102.27 $/bbl after a 3.90 per cent fall. ARA CIF coal firmed on Tuesday with Cal-27 settling at 123.20 $/t (up 1.69 per cent), Cal-28 at 119.86 $/t and Cal-29 at 119.39 $/t. Carbon settled higher despite oil weakness, with EUA Dec-26 closing at 75.71 €/tonne (up 3.66 per cent), Dec-27 at 78.42 €/tonne and Dec-28 at 81.15 €/tonne, while UK ETS Dec-27 settled at 61.82 €/tonne (up 1.54 per cent), leaving the UKA-EUA discount on the Dec-27 vintage at around 16.60 €/tonne. Asian JKM remains well-bid at 17.77 $/MMBtu, sustaining competition for flexible LNG cargoes. Sterling was little changed at 1.1582 against the euro and 1.3539 against the dollar.