Energy Market Report - 17 June 2026
European energy markets fell back on Tuesday as the geopolitical risk premium tied to the Middle East conflict began to unwind, with a US-Iran framework expected to be signed in Switzerland on Friday. Oil led the move with sharp losses and gas and power followed on softer prompt fundamentals and warmer weather, while carbon bucked the trend to hold near multi-month highs.
Natural Gas
UK and European gas prices extended their decline on Tuesday, driven lower by easing geopolitical tension and forecasts for warmer weather. A signed US-Iran framework could see the Strait of Hormuz reopen to shipping within 30 days, restoring LNG flows and removing some of the supply premium built into the curve, though traders remain cautious while the deal is unsigned and the waterway is still thought to be mined. The NBP front-month settled at 99.40 p/therm and the day-ahead at 102.30 p/therm, with TTF easing to around 42 €/MWh. Supply is comfortable, with Gassco nominations near 297 mcm/day, flows to the UK up about 2 mcm/day, and UK LNG send-out up roughly 3 mcm/day on stronger Isle of Grain deliveries, a cargo due at South Hook. The clear weak spot is GB storage, which National Gas data shows at a several-year low of around 2.5 TWh, under 10 per cent of capacity, after heavy recent withdrawals; EU storage is healthier at roughly 45 per cent full and injecting around 2.2 bcm/week.
Electricity
UK power followed gas lower at the prompt but held firmer further out. Day-ahead baseload settled at 102.50 £/MWh, down almost 6 pounds, as cheaper gas reduced thermal generation costs and demand expectations eased. Tuesday's mix leaned on gas, with wind subdued and CCGT dominant, though wind and solar are forecast to recover towards the weekend. The forward curve proved more resilient, supported by a thin UK nuclear fleet - both Sizewell B units, Torness 1 and several Heysham and Hartlepool units are offline - and by the risk of French nuclear curtailment as Rhône water temperatures rise, with restrictions flagged at Bugey from 23 June. Winter 26 baseload was little changed at 96.33 £/MWh and Summer 27 firmed slightly to 76.50 £/MWh.
Other Commodities
Oil saw the sharpest moves of the session, Brent falling around 5 per cent to 78.96 $/bbl and WTI to 76.05 $/bbl, extending a weekly drop near 14 per cent as the prospect of a US-Iran settlement and a reopened Hormuz drained the war premium; physical constraints, with the Strait still mined, leave some floor under prices. Coal eased in step, ARA Cal 27 settling at 113.61 $/tonne. Carbon moved against the grain, with EUAs near four-month highs at 79.85 €/tonne, broadly flat on the day but up close to 5 per cent on the week, while the UK ETS firmed to 59.54 £/tonne on news of a UK-EU summit on 22 July that may consider linking the two schemes. Global LNG benchmarks softened modestly, JKM at 15.94 $/MMBtu and Henry Hub around 3.10 $/MMBtu, while sterling was broadly steady against the euro and dollar.