Energy Market Report - 18 August 2026
Energy markets extended their advance on Monday as the expiry of the US-Iran interim memorandum without a breakthrough, alongside the continued closure of the Strait of Hormuz, drove buyers back into gas, power and crude. UK power was the sharpest mover of the session, rising close to twelve per cent on the day as wind generation fell away, while the far end of the forward curve stayed flat to marginally softer.
Natural Gas
Gas prices firmed on security-of-supply concerns rather than on any physical shortage, with NBP day-ahead settling at 152.60 p/therm and TTF day-ahead at €62.05/MWh. Norwegian flows remained robust at 323.9 mcm/day on Monday with 320.3 mcm/day nominated today and further production returning from maintenance later this week, while UK LNG sendout held steady at 8 mcm/day and the system opened 4 mcm/day long. The concern instead is what a prolonged Hormuz closure means for Qatari LNG reaching Europe, set against storage that is only around 61 per cent full, with Germany at 49.9 per cent and the Netherlands at 41.8 per cent. Winter 26 rose to 152.66 p/therm and Q4-26 to 155.63 p/therm, and the monthly strip peaks at 158.01 p/therm for January 2027 before falling away sharply from April, indicating that the market sees this as a winter-specific risk rather than a lasting repricing.
Electricity
UK power rose far more than gas, because the driver was a collapse in wind output rather than fuel costs. Day-ahead baseload settled £14.64 higher at £138.94/MWh, with wind accounting for less than two per cent of the generation mix at points on Monday morning and the grid leaning heavily on CCGTs, nuclear and interconnector imports. Balancing prices reached £350/MWh shortly after 06:00 before the system swung long through the afternoon and traded down to £109.60/MWh, then firmed back above £200/MWh for the evening ramp, and the system has been short through most of this morning with demand near 28.0 GW. Nuclear availability is a growing constraint, with Hartlepool 2 and Heysham 1 unit 1 already offline and Torness 1 due off from Friday. Continental markets diverged, with French and German front-month contracts falling on cooler and wetter forecasts despite French nuclear unavailability averaging 19.4 GW for late August.
Other Commodities
Crude led the complex higher, with Brent M+1 settling $2.35 up at $90.87/bbl and WTI gaining 2.55 per cent to $84.50/bbl on stalled Middle East diplomacy. Coal was mixed, with API2 ARA Cal-27 broadly flat at $125.05/tonne while Cal-28 and Cal-29 both fell around 1.7 per cent, echoing the front-loaded shape seen in gas. Carbon offered a modest offset to generator costs, EUA Dec 26 easing €0.21 to €81.58/tonne while UK ETS Dec 26 rose £0.18 to £59.07/tonne, leaving the UK allowance at a discount of roughly €12.5/tonne to its European equivalent. In global LNG, JKM M+1 firmed to $21.61/MMBtu, holding a healthy premium over Northwest European LNG at $19.89/MMBtu, while Henry Hub spot slipped to $2.77/MMBtu. Sterling was little changed at 1.1696 against the euro and 1.3543 against the dollar, and was not a factor in the session.