Signs of de-escalation in the Middle East drove a second consecutive session of losses across European gas, power and crude on Monday, with front-quarter contracts giving up close to 13 per cent over the week. The physical UK market moved the other way, as a sharp fall in wind output lifted day-ahead power well above Friday’s level and prompted a margin notice from the system operator.
Natural Gas
Gas prices fell again as the geopolitical premium built up during the Iran conflict continued to unwind, with reports of a shift in Iranian negotiating posture over the Strait of Hormuz and signals from Washington playing down further military action. NBP day-ahead settled 9.20p lower at 204.80 p/therm, December 2026 at 205.22 p/therm and Q1-27 at 201.23 p/therm, with TTF December at €82.50/MWh and spot at €82.58/MWh. Supply offered no support to the bulls: Norwegian exit nominations held at 333.4 mcm/day despite maintenance at Visund curtailing 13.2 mcm/day, Langeled rose to 76 mcm/day, Vesterled and Flags jumped 17 mcm/day and UK continental shelf output firmed to 114.4 mcm/day, leaving the system around 6 mcm/day long. LNG sendout is forecast near 54 mcm/day with a heavy, almost entirely US-sourced arrivals programme into north-west Europe over the next three days. Continued European storage withdrawals through the cold spell remain the one fundamental still arguing for support, and prices were offered higher again this morning after two heavy sessions.
Electricity
Forward power followed gas lower while the prompt tightened sharply, a split driven almost entirely by wind. December baseload settled £6.52 lower at £167.48/MWh, Q1-27 at £169.29/MWh and calendar 2027 at £131.62/MWh, losses of 7 to 9 per cent on the week. Day-ahead baseload, by contrast, settled at £246.67/MWh and day-ahead peak at £297.88/MWh, up £31.67 and £74.56 respectively, after wind fell from around 28 per cent of the generation stack to just over 9 per cent and gas-fired generation rose to near 59 per cent. Gas-fired output had climbed 55 per cent week on week to 16.6 GW, Britain turned net exporter and NESO issued an Electricity Margin Notice, with the evening peak period clearing at £755/MWh against an overnight low near £102/MWh. Four concurrent outages across Heysham 1 and Heysham 2 continue to limit nuclear availability. Continental markets were tighter still, with German day-ahead at €351.48/MWh, its highest since 2022, and Dutch day-ahead at €338.73/MWh, restricting the relief available through interconnectors. Wind is forecast to rise sharply through the week and prompt power was offered materially lower this morning.
Other Commodities
Crude led the wider complex down, with Brent front-month settling $5.75 lower at $92.57/bbl and WTI at $86.85/bbl, both off around a tenth on the week as tanker traffic through Hormuz recovered and Qatari-brokered diplomacy advanced. Coal weakened in sympathy, with API2 ARA Cal-27 down $3.65 to $124.00/tonne and the 2028 and 2029 contracts near $113/tonne. Carbon was the exception: EUA Dec-26 firmed €1.10 to €87.65/tonne after opening below €87, while UK ETS Dec-26 gained £0.94 to £65.69/tonne, equivalent to €78.74/tonne and a discount of roughly €8.90/tonne to the EU benchmark, a spread that has held steady through the sell-off. Global LNG benchmarks fell faster than European gas, with JKM down $1.38 to $27.30/MMBtu and north-west European LNG at $27.46/MMBtu, while Henry Hub rose 7.3 per cent to $3.22/MMBtu, widening the incentive for US cargoes to continue flowing towards the Atlantic basin. Sterling firmed 0.68 per cent against the dollar to 1.3440 and was unchanged against the euro at 1.1986.