Energy Market Report - 08 July 2026
A serious escalation around the Strait of Hormuz drove a broad risk premium through European energy on Tuesday, lifting gas, power and crude as the market weighed the threat to Gulf shipping. Carbon was the exception, easing on both sides of the Channel even as the wider complex rallied.
Natural Gas
UK gas surged, with the NBP day-ahead settling near 111p/therm and the front-month around 110.75p/therm as a heavy geopolitical premium was priced into the curve, the market opening firmer still on Wednesday. The move followed reports that the Qatari LNG tanker Al Rekayyat had been struck in the Strait of Hormuz and that a crude tanker had been immobilised nearby, ahead of US strikes on Iranian military targets and Iranian retaliation against US assets in Bahrain and Kuwait. TTF tracked NBP higher, the front-month settling around €46 to €47/MWh. Fundamentals added a modest prop: UK end-use demand rose on strong gas-for-power burn near 48 mcm/day and warm weather, Norwegian nominations eased to around 324 mcm/day after an unplanned compressor outage, and European storage held around half full and behind seasonal norms, leaving the market sensitive to any further supply news. A heavy LNG arrivals schedule into north-west Europe offered some offset.
Electricity
UK power followed gas higher, with the day-ahead baseload settling around £110/MWh and opening firmer near £111/MWh on Wednesday, and front seasons firming around 3 to 4%. The immediate driver was prompt tightness: metered wind output was forecast to fall to around 2.5 GW, warm conditions lifted cooling-driven demand, and roughly 2.2 GW of unplanned outages, including gas turbine capacity at Pembroke and Carrington, tightened the balance alongside an extended run of nuclear outages. The system operator leant heavily on interconnector imports to cover the wind shortfall, which limited the rise in gas-fired generation and kept the increase in baseload more measured than the move in gas, though the risk of evening margin notices from NESO rose into the peak.
Other Commodities
Crude rallied on the same headlines, Brent settling around $74/bbl, up close to 3%, and trading to a two-week high near $76/bbl in early Wednesday dealing, with WTI near $70/bbl; the driver is the threat to transit through the strait rather than any confirmed barrel losses. Coal was firmer, with ARA CIF Cal 27 around $111/tonne. Carbon diverged and softened, the EUA December 26 contract settling around €80/tonne, down close to 2%, and the UK ETS easing to around £57/tonne, with the market weighing demand destruction from high energy costs. Global LNG benchmarks firmed, Asian JKM near $17/MMBtu holding its premium over north-west Europe, while US Henry Hub was little changed around $3.3/MMBtu, underlining that the stress is concentrated in seaborne LNG rather than American supply. Sterling softened against the dollar to around $1.3352.