Energy Market Report - 18 September 2026
European energy markets extended their retreat for a third consecutive session on Thursday as the geopolitical premium built into prices earlier in the month continued to unwind, with Saudi Arabia confirming a timeline to restore its damaged East-West crude pipeline and crude easing accordingly. In the UK, an exceptional renewables outturn drove the prompt sharply lower and pulled the forward curve with it, though carbon moved firmly in the opposite direction and the underlying supply position remains tight.
Natural Gas
Prices fell across the curve, driven by positioning and a collapse in the gas-for-power call rather than by any improvement in supply. Day-ahead NBP settled 2.00p lower at 191.60p/therm, leaving the UK at a small discount to Continental hubs, while October fell to 190.73p/therm, Q4 26 to 193.27p/therm and Winter 26 to 192.64p/therm. Winter 26 has now given back around 13p from its peak on 10 September. Far-dated contracts were unchanged, which confines the correction to this winter. The physical background offers little reassurance. An unplanned compressor failure at Norway's Troll field cut 39.4 mcm/day on Thursday, has since deepened to 46.2 mcm/day and now runs through to 25 September, though the clearing of the Kollsnes outage and the imminent conclusion of Sleipner work restore around 27 mcm/day between them. The UK system was comfortable on the day, opening 22 mcm/day long with demand at 86.66 mcm/day and domestic production at 93.30 mcm/day. Storage is the real exposure, with EU sites 68.66 per cent full, Germany at 56.02 per cent and the UK at just 31.31 per cent, all short of seasonal norms and with injection season nearly over. Ten LNG cargoes are scheduled into Northwest Europe to 21 September, mostly US-origin, but commercial transit through the Strait of Hormuz remains largely suspended under force majeure and forecast global supply for 2026 has been cut by roughly 20 million tonnes.
Electricity
Power fell hard at the prompt on an extraordinary renewables day, with wind supplying 52.9 per cent of the GB mix and total renewables reaching 73.5 per cent, the highest since May 2025. Day-ahead baseload settled £7.29 lower at £103.95/MWh, and the day-ahead peak cleared at £85.50/MWh, some £18.45 below baseload, an inversion driven by solar and wind output rather than any weakness in demand. System prices ran from £204.40/MWh in the early morning ramp down to minus £10.98/MWh by mid-morning, with the system long for two thirds of the day. Forward contracts fell across the board, October baseload to £147.31/MWh, Winter 26 to £154.59/MWh and Q1 27 down a heavy £7.48 to £155.79/MWh, while on the Continent day-ahead cleared at €127.75/MWh in Germany and €127.00/MWh in France. The near-term direction is the reverse: wind is expected to fall away, lifting gas-for-power demand, and forecasts of a pronounced lull from Monday to Wednesday have already pushed German and Dutch week-ahead contracts to multi-year highs above €184/MWh. That coincides with a thin UK nuclear fleet, with unplanned outages at Heysham 1 and Hartlepool alongside four units on planned work, and gas-fired availability near 18.2 GW that is not scheduled to recover toward 25 GW until mid-October.
Other Commodities
Brent front-month settled $1.01 lower at $104.82/bbl and WTI at $101.91/bbl, a third consecutive decline as Saudi Arabia confirmed it will restore around half of its East-West pipeline capacity within days and target full service inside six weeks, using shuttle tankers through the Strait of Hormuz in the interim. Coal was subdued, with API2 Cal 27 easing to $135.07/tonne. Carbon diverged from the wider complex: EUA Dec 26 gained €1.29 to €86.03/tonne with the full strip firmer, while UK ETS Dec 26 was flat at £59.76/tonne, leaving UK allowances at a €16.40/tonne discount to their European equivalent and lagging by more than 4 per cent over the week. In LNG benchmarks, JKM front-month fell to $26.75/MMBtu with November assessed at $27.39/MMBtu, Northwest European October slipped to $25.30/MMBtu and Henry Hub spot eased to $2.90/MMBtu. Sterling was marginally weaker on the day at $1.3355 and €1.1651.