Energy Market Report - 11 August 2026
Escalating disruption to Middle East shipping and an extended Norwegian production outage drove UK and European gas prices sharply higher on Monday, with power and crude following. Carbon was the only part of the complex to fall, easing in both the European and UK schemes.
Natural Gas
Gas prices surged on supply security concerns rather than weather. The UK day-ahead contract settled at 146.65 p/therm, up 10.40 p/therm on Friday, while the Winter 26 contract rose 12.52 p/therm to 149.20 p/therm, a gain of over nine per cent that brought the front season back close to last month's multi-year high. The immediate trigger was Norway's Gassco extending a partial outage at the Ormen Lange field through to 1 February 2027, removing roughly 9 mcm/day of capacity for most of the coming winter. That landed on a market already pricing risk around the Strait of Hormuz, where vessel transits fell to six on Monday against a recent average of around eleven, and where continued attacks in the Red Sea are forcing LNG tankers onto longer routes. European storage stands at 58.8 per cent full with injections running slowly, and market expectations for the pre-winter refill have slipped towards 70 to 75 per cent, materially below the levels normally regarded as comfortable. TTF front month rose to €60.80/MWh, with UK supply on the day covered by 80.10 mcm/day of UKCS production and 45.50 mcm/day through Langeled, while LNG sendout held steady at around 8 mcm/day.
Electricity
Power rose because fuel costs rose, not because the system was short. UK day-ahead baseload settled at £125.82/MWh and Winter 26 baseload gained £5.08/MWh to £121.91/MWh, a rise of around four per cent against a gas move more than twice that size, meaning generator margins narrowed through the session. The intraday pattern was unusually wide, with prices falling to £47.77/MWh in the early afternoon on strong solar output before holding above £225/MWh through the late evening once solar fell away, while wind stayed below seasonal norms throughout. That shape left the day-ahead peak price below the baseload average, since the peak window captured the solar-suppressed afternoon while the expensive hours fell outside it. Nuclear availability is set to tighten, with Hartlepool 2 already offline and further planned outages at Heysham 1 and Torness 1 starting on 17 and 21 August. On the Continent, heat-related restrictions on French reactors and continued Belgian availability problems pushed fourth quarter contracts across the major hubs to multi-session highs, with UK Cal 27 baseload closing at £92.53/MWh.
Other Commodities
Crude rose firmly, with Brent front month up $4.17/bbl to $87.72/bbl and WTI up around five per cent to $82.13/bbl, driven by the deteriorating outlook for Gulf shipping and by continued Ukrainian drone strikes on Russian refining capacity, which are tightening an already stretched global distillate market. Coal followed, with API2 ARA Cal 27 gaining $5.56/tonne to $124.38/tonne and the back end of the curve sitting close to flat around $118/tonne. Carbon diverged from the rest of the complex: the EUA Dec 26 contract eased €1.02 to €82.27/tonne, while UK ETS Dec 26 fell more steeply, down £1.48 to £59.02/tonne, widening the UK allowance discount to the European scheme to roughly €13.29/tonne. In global gas, JKM front month jumped almost ten per cent to $21.44/MMBtu, though at a premium of under $1/MMBtu over European spot it remains insufficient to pull cargoes decisively east, while Henry Hub spot was little changed at $2.72/MMBtu. Sterling firmed modestly to 1.1687 against the euro and 1.3503 against the dollar, too small a move to affect import economics.