Energy Market Report - 20 August 2026
With the United States and Iran still deadlocked over the Strait of Hormuz and shipping traffic constrained, geopolitical risk continues to sit underneath every European energy price, even on days when the market corrects lower. Wednesday was one of those days: gas and power both eased at the prompt on cooler weather and better supply, while the forward curve stayed firm on storage concerns and crude added to its weekly gains.
Natural Gas
Prompt gas prices corrected downwards as the physical picture improved, with UK NBP day-ahead settling 0.25p lower at 157.00 p/therm and the September contract easing to 156.39 p/therm, while TTF day-ahead settled at €63.40/MWh. Last week's heatwave has passed and temperatures across the UK and northwest Europe are expected to fall below seasonal norms over the weekend, trimming near-term demand, while LNG sendout across northwest Europe improved to 1,485 GWh/day on a cargo arrival at Fos and continental LNG imports have averaged around 333 mcm/day through August. UK LNG sendout was steady at 8 mcm/day and UKCS production held near 87 mcm/day, with the system opening 27 mcm/day long this morning. The forward curve is a different market: Winter 26 closed effectively unchanged at 157.83 p/therm and the 2027 contracts gained ground, because European storage is filling too slowly - EU fullness sits at 61.6 per cent, Germany at 50.1 per cent and the Netherlands at just 42.5 per cent against a 74 per cent target. Supply availability reasserted itself this morning, with an unplanned outage at Norway's Kårstø plant cutting roughly 23 mcm/day and planned maintenance beginning at Åsgard, though Norwegian imports into the UK still climbed to 83 mcm/day on stronger Langeled flows.
Electricity
UK power followed gas lower at the day-ahead, with baseload settling £2.34 down at £140.66/MWh, but the generation mix moved considerably beneath that calm surface. Wind fell to around 16 per cent of the stack from 28 per cent the previous day, solar picked up much of the slack and peaked above 10 GW in the early afternoon against 7.4 GW on Tuesday, and CCGT ran close to 44 per cent of the mix. Strong midday solar pushed the day-ahead peak contract to £131.92/MWh, below baseload - an inversion that reflects cheap solar in the middle of the day and expensive gas-fired generation overnight and into the evening. Demand eased and Great Britain exported across the day, unsurprising given German day-ahead baseload settled at €153.00/MWh and France at €150.15/MWh. Forward power was mixed, with September easing to £126.10/MWh and Q4 26 to £131.35/MWh while Q1 27 rose to £129.59/MWh and Winter 26 to £130.48/MWh. French nuclear output is scheduled to step up to 42.0 GW today, though Spanish reactors at Ascó and Vandellòs remain offline on cooling problems, and stronger wind across the continent from Monday should ease system margins into next week.
Other Commodities
Crude firmed again as the Hormuz standoff dragged on, with Brent settling at $91.62/bbl and WTI at $85.83/bbl, both up around 3 per cent on the week, and the UAE's suspension of economic and financial transactions with Iran adding a further layer of regional risk. Coal API2 ARA Cal 27 gained $1.43 to $127.06/tonne, holding a clear premium to the 2028 and 2029 contracts at around $118/tonne. Carbon eased on both schemes, with the EUA December 2026 contract down €0.60 at €81.71 per tonne and the UK ETS December 2026 contract off £0.25 at £59.04 per tonne, leaving the UK allowance at a discount of roughly £11 per tonne to its European equivalent - a spread that narrowed slightly over the week and remains sensitive to any movement on linkage. In global LNG benchmarks, Asian JKM settled at $22.09/MMBtu against northwest European LNG at $20.16/MMBtu and Henry Hub at $2.81/MMBtu, a premium sufficient to keep Asian buyers interested but not to redirect Atlantic cargoes. Sterling firmed 0.55 per cent against the dollar to 1.3603 while holding flat against the euro at 1.1681.