Energy Market Report - 12 May 2026
A cooler weather profile, fresh Norwegian supply disruption and a hardening US-Iran standoff drove a coordinated rally across European gas, power and crude on Monday. The UK day-ahead in power moved the other way on a strong wind print, but the curve repriced higher to reflect renewed risk premium and a heavier summer storage refill task.
Natural Gas
NBP firmed across the curve as forecasts pushed northwest European temperatures more than 5°C below seasonal norm into the back of the week, with Jun-26 adding 5.32p/therm to settle at 113.43p/therm and Win-26 lifting 4.96p/therm to 115.32p/therm. Morning indications on Tuesday extended the move, with Jun-26 trading near 117p/therm and TTF Jun-26 likewise firmer at €46.23/MWh. The supply backdrop added to the bid tone after unplanned maintenance at Hammerfest removed around 18 mcm/day of LNG capacity into mid-week, while aggregated Norwegian flow restrictions are set to deepen before a sharp recovery to 182.6 mcm/day next Wednesday. Storage is the structural driver, with EU sites near 35 per cent full and UK inventories around 22 per cent - well below this point last year - leaving Summer-26 increasingly priced around the cost of refill rather than current burn.
Electricity
UK baseload tracked gas higher across the curve, with Jun-26 gaining £5.58/MWh to £97.68/MWh and Win-26 adding £3.84/MWh to £98.34/MWh as carbon strength and weaker nuclear availability layered on top of the gas move. Heysham 1-2 remained offline on unplanned outage and Sizewell B units 1 and 2 are set to enter planned maintenance from 20 May, thinning the baseload stack into late spring. The day-ahead diverged, settling £6.82/MWh lower at £93.81/MWh as wind averaged 10.4GW on Monday at around 32.5 per cent of the GB mix and forecasts kept renewable output above seasonal norms for the rest of the week. Gas-for-power on the day-ahead was nominated at 23 mcm/day, with nuclear contributing roughly 3.5GW and solar also running above average for the time of year.
Other Commodities
Brent added 2.88 per cent to settle at $104.21/bbl and extended in early Tuesday trade towards $107/bbl after the US publicly rejected Iran's latest counter-proposal as "totally unacceptable", maintaining a clear risk premium despite continued shipping through the Strait of Hormuz. WTI followed to $98.07/bbl. Coal ARA CIF Cal-27 rose 1.85 per cent to $120.20/tonne, drawing support from the firmer carbon market. EUA Dec-26 climbed €2.00/tonne to €77.18/tonne, the highest level since early February, with the UK ETS adding £2.98/tonne and pushing further premium into seasonal UK power contracts. In FX, sterling softened modestly, with GBP/EUR at 1.1562 and GBP/USD at 1.3607.