Energy Market Report - 21 July 2026
A ninth consecutive night of strikes between the United States and Iran kept wholesale energy markets on the front foot into Monday's close, with disruption to shipping through the Strait of Hormuz feeding supply-security concerns across gas, power and oil. Carbon added its own impetus, rallying more than 5 per cent after the European Commission set out plans to overhaul the EU emissions trading system.
Natural Gas
Gas prices strengthened through Monday as traders added to the geopolitical premium at the front of the curve. Day-ahead NBP settled at 141.00p/therm and the August contract at 141.46p/therm, up around 2 per cent on the day, while TTF priced near €58/MWh. The fundamental picture remains comfortable - Norwegian nominations rose to around 333.7 mcm/day, UKCS production is steady and the UK continues exporting surplus gas through IUK and BBL - but European storage at roughly 53.7 per cent full sits more than ten percentage points below last year, and shipping activity through Hormuz remains well below normal, keeping LNG supply security in focus. Contracts from next summer onwards eased slightly, suggesting the market still reads the rally as a near-term risk story. Prices have lifted again this morning, with reports of possible ceasefire discussions the main potential brake.
Electricity
UK power jumped on the prompt, with Monday's day-ahead baseload clearing at £127.40/MWh - up from £99.03 on Friday - as poor wind output, warm weather and mounting nuclear outages combined with the firmer gas complex. More than 3 GW of UK nuclear capacity is currently offline following an unplanned shutdown at Heysham 2 on Monday, and evening balancing prices approached £190/MWh. The forward curve rose more modestly, with Winter-26 baseload up £3.02 to £121.63/MWh and next summer broadly flat. Solar met around a third of UK demand during daylight hours, French nuclear availability near 38 GW is keeping the Continent relatively comfortable, and German wind is forecast to recover to above seasonal norms by Thursday, which should ease some of the near-term tightness.
Other Commodities
Brent crude settled $1.12 higher at $89.22/bbl on Monday, extending Friday's sharp gains, and has traded above $90/bbl this morning on Iranian warnings that flows through the Strait of Hormuz would stop should US military action continue. Coal firmed alongside, with API2 Cal-27 up to $123.24/tonne. Carbon led the complex in percentage terms: EU allowances for December 2026 delivery jumped €4.16 to €83.27 per tonne on Brussels' proposed ETS reforms, which could see up to 80 per cent of allowances issued free until 2040 tied to decarbonisation investment, and UK allowances rose £3.00 to £61.70 per tonne. In global gas benchmarks, JKM held near $21/MMBtu and Henry Hub at $2.80/MMBtu, with reported Pakistani LNG buying plans adding to demand-side pressure. Sterling was little changed against both the euro and the dollar.