Energy Market Report - 12 August 2026
Reports of progress in the Iran-Oman negotiations over Strait of Hormuz transit pulled some of the geopolitical premium out of European gas on Tuesday, though continued attacks on shipping meant the relief did not extend to crude. Power moved in the opposite direction to gas, driven by falling wind and heat-related demand, while carbon firmed modestly in both the European and UK schemes.
Natural Gas
Gas prices eased on Tuesday as diplomatic headlines outweighed a physical picture that has not materially improved. Signals from mediators that a US-Iran arrangement on Hormuz transit was at an advanced stage prompted traders to unwind part of Monday's rally, with the front of the curve taking the brunt: NBP Sep-26 fell 5.50 p/therm to 144.22 p/therm, Q4-26 fell 4.82 p/therm to 147.68 p/therm and Winter 26 dropped 4.25 p/therm to 144.96 p/therm, while day-ahead slipped only 1.65 p/therm to 145.00 p/therm. TTF followed, with the September contract down 3.39 per cent to €58.74/MWh. Supply was steady rather than generous - Norwegian exit nominations reached 317.4 mcm/day on Tuesday and have risen to 325.5 mcm/day this morning, with Langeled up to 52 mcm/day, but curtailments of 28.2 mcm/day are scheduled to climb towards 33.3 mcm/day by 18 August and UK LNG sendout is static at 8 mcm/day. Storage remains the market's principal concern, with EU inventories at 59.12 per cent on 9 August, roughly 12 percentage points below the same point last year, Germany below 50 per cent and the Netherlands below 40 per cent. European LNG imports averaging around 343 mcm/day so far this month, some 17 per cent above July, are the main counterweight.
Electricity
UK power decoupled from gas on Tuesday and traded the weather. Day-ahead baseload rose £7.42/MWh to £133.24/MWh as wind generation fell further below seasonal norms and a heatwave lifted cooling demand, with gas-for-power requirements forecast up 13 mcm/day today. Peak settled below baseload at £119.32/MWh, a reflection of strong solar depressing the middle of the day while overnight periods cleared well above £160/MWh. The forward curve was far calmer, with Winter 26 baseload adding £0.41/MWh to £122.32/MWh and Q4-26 £0.38/MWh to £124.09/MWh, while summer contracts softened - Summer 27 fell £3.06/MWh to £80.74/MWh. With gas seasons falling and power holding, generation margins widened across both the prompt and the coming winter. The continent offered no relief: French spot base reached €141.20/MWh on heat-related nuclear derating and a jellyfish swarm that removed over 3.1 GW at Gravelines, with total French outages expected to peak near 10.7 GW today, while German and Dutch spot both cleared above €134/MWh. Domestic nuclear availability also tightens shortly, with Hartlepool 2 already off and Heysham 1-1 and Torness 1 due to come down from 17 and 21 August. Attention today turns to a deep partial solar eclipse over the UK this evening, expected to remove around 1.6 GW of British solar output during the evening ramp.
Other Commodities
Crude rose as fresh attacks on shipping reported by both the US and the Houthis undermined confidence in a near-term Hormuz resolution, with Brent M+1 settling $1.19 higher at $88.91/bbl and WTI at $83.20/bbl, leaving Brent roughly 12 per cent up on the week. Coal was quiet, with API2 ARA Cal-27 adding $0.37 to $124.74/tonne and the outer years holding near $118.60/tonne. Carbon firmed modestly on both sides: EUA Dec-26 settled at €82.44/tonne and UK ETS Dec-26 at £59.13/tonne, leaving the UK allowance at roughly €69/tonne equivalent and a discount of around €13/tonne to the European contract, which remains the single largest differentiator in UK thermal generation costs. In global LNG, JKM M+1 fell $0.79 to $20.66/MMBtu and north-west European Sep-26 slipped to $19.31/MMBtu, narrowing the Asian premium and keeping Atlantic cargoes directed towards Europe, while Henry Hub spot edged up to $2.79/MMBtu. Sterling was effectively unchanged at $1.3504 and €1.1698, adding nothing to the day's moves in domestic terms.