Energy Market Report - 21 August 2026
Escalating US sanctions pressure on Iran and a fresh Norwegian supply outage pushed European gas and power markets higher again into the close on Thursday, extending a rally that has now run for the better part of three weeks. Crude settled firmer on the same news before easing this morning, while carbon and coal both added to the cost of thermal generation.
Natural Gas
Gas rose because supply tightened. Norway's Gassco reported that an unplanned process issue at Kårstø had deepened to a 30 mcm/day curtailment on Thursday, reducing available capacity to 65 mcm/day, at the same time as the US Treasury Secretary set out plans for the toughest sanctions regime yet on Iran, targeting oil smuggling, swap lines and front companies, and the UAE suspended financial dealings with Tehran. NBP day-ahead settled at 161.25 p/therm and the September contract at 161.23 p/therm, both up around 3 per cent, while TTF day-ahead closed at €65.46/MWh and TTF September at €65.30/MWh. Winter 26 gas settled at 162.60 p/therm, its highest of the year, with the curve now peaking at 167.91 p/therm for January before falling sharply into next summer. The backdrop that keeps this rally going is storage: EU sites are only around 61.6 per cent full for the time of year, Germany is at 50.19 per cent and the Netherlands at 42.75 per cent, and Bavaria has asked Berlin to step in as regional facilities fall behind winter targets. LNG supply itself is comfortable, with ten cargoes booked into north-west Europe over the coming days and UK sendout steady at 8 mcm/day. This morning the UK system opened 6 mcm/day long and the Kårstø curtailment has eased to 5 mcm/day, though Langeled flows are down 10.4 mcm/day.
Electricity
Power followed gas up but passed through only part of the move, with UK day-ahead baseload settling at £141.97/MWh against £140.66 the previous session. The restraint came from the generation mix: strong afternoon solar left the system substantially long through the late afternoon, pulling system prices down to £103.00/MWh, before a tight evening ramp took them to £192.59/MWh once solar dropped out. That shape left day-ahead peak at £135.43/MWh, below baseload for a second session running. Forward power was firmer, with Q4-26 baseload up 2.2 per cent to £134.26/MWh, Winter 26 at £133.38/MWh and Calendar 27 at £99.24/MWh. Nuclear availability is thinning, with Torness 1 joining Hartlepool 2 and Heysham 1-1 offline from today, taking close to 1.9 GW out of the UK stack. On the Continent, French September nuclear availability was revised up to an average of 14.2 GW although the two Chooz reactors remain offline on river cooling constraints, Hungary's Paks plant is expected to ramp from 23 August, and Bulgaria's Kozloduy curtailed 140 MW this morning on low Danube levels. Continental spot baseload settled well above the UK, at €169.56/MWh in Germany and €152.80/MWh in France, with Great Britain a net exporter.
Other Commodities
Brent front-month settled at $93.78/bbl, up $2.16, on the Iran sanctions announcement, though prices have eased this morning as the market took the view that economic pressure could be applied without further military escalation - a comfortable assumption given Hormuz traffic remains at a trickle. API2 ARA coal for Cal-27 firmed to $128.27/tonne. In carbon, EUA Dec-26 settled at €82.45/tonne, up €0.74 on the bullish gas impulse, while UK ETS Dec-26 was effectively unchanged at £58.97/tonne, leaving the UK allowance at a discount of roughly £11.70/tonne to the European contract and providing a modest relative advantage to UK gas-fired generation. Global LNG benchmarks moved together, with JKM at $22.61/MMBtu sitting only fractionally above NBP spot at $21.98/MMBtu and TTF spot at $22.41/MMBtu, a spread too narrow to pull Atlantic cargoes toward Asia, while Henry Hub spot eased to $2.83/MMBtu. Sterling was little changed at 1.1665 against the euro and 1.3629 against the dollar.