Energy Market Report - 20 July 2026
A ninth consecutive day of strikes between the US and Iran, including reported attacks on oil tankers in the Strait of Hormuz, has pushed energy markets sharply higher, extending Friday's broad rally. Gas, power and oil all closed the week up strongly and have opened firmer again this morning.
Natural Gas
British and European gas prices rallied on Friday as traders priced a fresh risk premium into winter supply. The NBP day-ahead contract gained 7.70 p/therm to settle at 139.50 p/therm, with August at 138.75 p/therm and Winter 26 at 139.26 p/therm, while TTF rose to the equivalent of roughly €57-58/MWh. Reports of a Russian drone strike on Ukrainian gas infrastructure added to concerns already stoked by the Middle East conflict. The physical picture remains steadier than the price action suggests: Norwegian exports held near 329 mcm/day despite maintenance at Asgard, UK production is firm and LNG sendout is healthy, though EU storage at around 53 per cent full sits nearly 11 percentage points below last year and competition with Asian buyers for cargoes is intensifying ahead of winter. This morning the UK system opened comfortably supplied, but prices are higher again on the weekend's escalation.
Electricity
UK forward power tracked gas higher on Friday, with Winter 26 baseload adding £3.33 to £118.61/MWh, while the day-ahead settled at £99.03/MWh reflecting low-demand weekend delivery; this morning day-ahead baseload is offered back near £128/MWh for the working week. Wind generation is forecast to stay below seasonal norms for the next seven days, keeping gas-fired plant busy, and nuclear availability is stretched, with Heysham 2-7 offline from today for around a month alongside existing outages at Hartlepool, Heysham 1 and Sizewell B. Solar output remains above normal, softening midday prices, and interconnectors continue to export UK gas-linked power context to the Continent, where French nuclear restrictions at Golfech-2 and Chooz-2 were extended and continental prices also closed higher.
Other Commodities
Brent crude settled $3.87 higher at $88.10/bbl on Friday and has risen further this morning to its highest since mid-June on the Hormuz escalation. Coal firmed, with API2 Cal 2027 up $2.93 to $121.53/tonne. Carbon was the outlier: EUAs closed broadly flat at €79.11/tonne for Dec 26 as a European Commission proposal to relax EU ETS rules weighed on sentiment, while UK allowances edged up £0.57 to £58.70/tonne, narrowing the UKA discount to a little over €10/tonne. In global gas benchmarks, JKM rose to $20.98/MMBtu on firming Asian demand while Henry Hub eased to $2.75/MMBtu, and sterling slipped modestly to 1.1751 against the euro.