Energy Market Report - 17 July 2026
A sixth consecutive night of US-Iran strikes has kept a heavy risk premium in near-dated gas and oil, with concerns over LNG transit through the Strait of Hormuz outweighing an otherwise comfortable European summer supply picture. Power is following gas higher after a wind-driven correction on Thursday, while carbon fell sharply across both the EU and UK schemes.
Natural Gas
Gas is being priced on supply security rather than fundamentals. NBP day-ahead settled marginally lower at 131.80p/therm on Thursday, but the near curve pushed higher, with Aug-26 up 1.10p at 131.98p/therm and TTF front-month reaching its highest level since late March. Prices have extended those gains this morning, with NBP Aug-26 indicated near 136.18p/therm and Q4-26 at 140.00p/therm, though Sum-27 and Win-27 both eased, indicating the market sees the risk as acute rather than permanent. Physically, Britain is comfortable: the system opened 15 mcm/day long, UKCS production has recovered to 95.00 mcm/day as the Barrow North outage concludes, and Norwegian nominations to the UK sit near 69 mcm/day. The concern is seasonal rather than daily. EU storage stood at just 52.8 per cent on 14 July, more than 10 percentage points below year-ago levels, with injections running behind seasonal norms and Asian buyers competing harder for a thin pool of spare cargoes ahead of winter.
Electricity
UK power corrected sharply on Thursday before turning back higher, and the direction is set by gas. Day-ahead baseload settled £8.33 lower at £124.67/MWh as forecasts pointed to a strong step up in wind, but with output now expected to fade and gas-for-power demand forecast at 33 mcm/day, baseload is offered around £130/MWh this morning. The forward curve settled slightly lower across the board on Thursday, with Aug-26 at £112.50/MWh and Q4-26 at £116.67/MWh, but is being marked up in line with gas, with Q4-26 now offered at £122.90/MWh. Nuclear availability is a growing constraint: Heysham 1-2, Hartlepool-1 and both Sizewell B units are fully offline, Heysham 2-7 goes to a 33-day outage from 20 July, and Torness-2 enters a planned outage from 31 July, leaving CCGT carrying more of the load. Continental conditions favour imports, with UK day-ahead at roughly €146.90/MWh comfortably above France at €140.73/MWh and Germany at €140.63/MWh, while French prices are supported by an outage at Flamanville-3, a delayed restart at Cattenom-4 and river temperatures limiting cooling water discharge.
Other Commodities
Crude eased on the day but is heading for its strongest week since April, with Brent M+1 down $0.72 at $84.23/bbl and WTI at $78.95/bbl, both around 10 per cent higher on the week and firmer again this morning as the Middle East escalation continues. Coal was quietly supported, with ARA CIF Cal-27 up $0.41 at $118.59/tonne. Carbon was the clear underperformer: EUA Dec-26 fell €1.97 to €79.19/tonne and UK ETS Dec-26 dropped £2.05 to £58.13/tonne, a broadly parallel move that left the UKA-EUA spread little changed at around a €10.70/tonne discount, reflecting softer prompt power rather than any UK-specific development. In LNG, JKM M+1 held at $19.93/MMBtu and north-west European LNG firmed to $16.94/MMBtu, while Henry Hub diverged lower at $2.86/MMBtu, down 5 per cent on the week on ample US supply. Sterling firmed to 1.1782 against the euro but fell 0.47 per cent to 1.3476 against a stronger dollar, marginally raising the sterling cost of dollar-denominated LNG and coal.