Energy Market Report - 07 August 2026
Geopolitical risk reasserted itself across the energy complex on Thursday, with shipping disruption through the Strait of Hormuz and the Red Sea lifting crude and adding a risk premium to European gas at the same time as a fresh Norwegian supply outage tightened the physical picture. Gas and power both closed higher, though power lagged, and a deepening continental drought is now a live constraint on hydro and nuclear generation across Europe.
Natural Gas
Prompt gas rallied on a supply problem rather than a demand shock. Norwegian exit nominations fell to 316.3 mcm/day on Thursday, with Gassco flagging a further 6 mcm/day curtailment at Åsgard, and flows to the UK were nominated around 3 per cent lower at 58.5 mcm/day. UK day-ahead settled at 137.00 p/therm, up 7.50 p/therm, with September 26 at 136.91 p/therm and Winter 26 at 136.73 p/therm, gains of roughly 6 to 7 per cent. TTF moved in step, with spot at €56.12/MWh and September 26 at €55.77/MWh. Conditions have tightened further this morning, with Norwegian nominations down to 312.2 mcm/day and the Kårstø restart delayed by a day, though higher UKCS output at 74.10 mcm/day is offsetting some of the loss and the UK system remains around 5 mcm/day long. LNG is the comfortable part of the picture, with ten cargoes due into north-west Europe by 13 August and nine of them US-sourced. Storage is not: EU inventories were nearly 58 per cent full on 4 August, just over 12 percentage points below last year, with injections running short of the pace needed for the 90 per cent target by December.
Electricity
Power followed gas higher but with far less conviction, because the system itself is not short. UK day-ahead baseload settled at £113.34/MWh, up only £2.06, while day-ahead peak fell £4.86 to £95.24/MWh as strong midday solar pushed peak below baseload. The forward curve firmed more consistently, with September 26 at £113.61/MWh, Q4 26 at £118.43/MWh and Winter 26 at £116.59/MWh. Intraday volatility remains extreme: Thursday's system prices ranged from £16.00/MWh in the early afternoon to £195.00/MWh in the evening ramp, and Wednesday saw prices fall to minus £48.00/MWh in the middle of the day. Wind output is forecast to fall by around a quarter into Friday, to 6.2 GW in the UK and 8.2 GW in Germany, lifting the call on gas-fired plant, and nuclear availability is thinning with Hartlepool 2 entering a 16-day outage today. Continental conditions are more strained still, with drought curtailing hydro and river-cooled nuclear across France and eastern Europe and German day-ahead baseload at €122.08/MWh.
Other Commodities
Crude led the wider complex higher, with Brent settling at $82.49/bbl, up 3.8 per cent, and WTI at $77.29/bbl, as transits through the Strait of Hormuz fell to 33 vessels over four days against 50 the prior week and reported attacks on Saudi shipping squeezed the Red Sea alternative. Both remain roughly 7.5 per cent lower over the week. Coal was subdued, with API2 ARA Cal 27 at $118.11/tonne, still down around 5 per cent on seven days. Carbon firmed on both schemes: EUA Dec 26 settled at €81.89/tonne and UK ETS Dec 26 at £59.48/tonne, leaving UK allowances at a discount of roughly €12.50/tonne to their EU equivalents, a spread that remains a key medium-term variable for British generators. In global gas, JKM rose to $19.77/MMBtu against north-west European LNG at $18.60/MMBtu, a modest Asian premium, while Henry Hub eased to $2.53/MMBtu. Sterling was effectively flat at 1.3453 against the dollar and 1.1668 against the euro.