Energy Market Report - 10 April 2026
Markets opened softer this morning after a volatile week dominated by Middle East tensions, though the relief proved tentative as the US-Iran ceasefire showed further signs of fracturing.
Natural Gas
Gas prices pulled back from recent highs as reports of potential Israeli-Lebanese negotiations offered a brief window of de-escalation. NBP front-month indicatives fell to around 113.90p/therm, down roughly 3% from Thursday's settlement, while day-ahead settled at 115.00p/therm on Wednesday. The UK system opened around 10 mcm/day long, with total demand at 170 mcm/day - some 25 mcm below seasonal norms. Norwegian exit nominations were broadly steady at 324.6 mcm/day despite ongoing Troll maintenance, while UK LNG send-out picked up to 13 mcm/day with Dragon returning at 4 mcm/day. Further along the curve, losses were more pronounced: Winter 26 shed 4.75p/therm to 113.00p/therm and Summer 27 dropped 4p/therm to 84.00p/therm. The back end remained anchored by a gradually improving storage outlook, though EU storage has now recorded five consecutive draws and inventories remain significantly lower year-on-year. The US-Iran ceasefire is under visible strain, with Washington accusing Tehran of breaching commitments on Strait of Hormuz transit. Only a handful of commercial vessels have passed through since Tuesday's agreement and no LNG tankers have been confirmed, keeping markets acutely sensitive to any disruption to Qatari and regional LNG supply.
Electricity
UK day-ahead baseload settled at £91.67/MWh on Wednesday, up £0.58, while peak jumped a notable £19.34 to £106.67/MWh as subdued wind and rising evening demand tightened margins. Weekend wind generation is forecast to lift materially above seasonal norms, easing system margins temporarily, but a sharp decline through next week's working days to well below normal levels is expected, supporting near-term gas-for-power demand. Curve power eased on the week, with Winter 26 baseload offered at £93.75/MWh, down £2.25. Nuclear availability is increasingly constrained - Heysham 1-1 entered a 130-day planned outage on 8 April, Torness 1 is due offline from 17 April for 27 days, and unplanned outages persist at Heysham 2-7. Clean spark spreads compressed on Thursday as gas and carbon moved in tandem, though prompt peaks could re-widen quickly if wind underperforms as forecast.
Other Commodities
Brent crude settled at $95.92/bbl on Wednesday before lifting overnight to around $97.50/bbl on renewed geopolitical tension, though the week-on-week picture remains sharply lower at around 12%. Coal API2 Cal 2027 was broadly flat at $116.61/tonne, down roughly 7% on the week. Carbon certificates firmed, with EUA Dec 26 settling at €73.72/tonne, up €2.05, and UKA Dec 26 at £42.90/tonne, up £0.74. The wide UKA-EUA spread remains a medium-term theme, but near-term pricing continues to track fuel markets and auction rhythm.
Outlook
The key watch points heading into next week are the US-Iran negotiations in Pakistan - any further deterioration of the ceasefire or Hormuz access could reignite the geopolitical premium that drove sharp gains earlier in the week. Wind generation forecasts showing a steep decline through working days, combined with accumulating nuclear outages, lend structural support to prompt power. Physical gas supply remains comfortable for now, but the market is priced for disruption risk rather than fundamentals, and sentiment could shift rapidly in either direction depending on diplomatic outcomes over the weekend.