Energy Market Report - 21 May 2026
Energy markets fell broadly yesterday as growing optimism over US-Iran negotiations eased the geopolitical risk premium that had supported prices in recent weeks. Warmer weather forecasts into the bank holiday weekend added to the bearish tone across gas, power and the wider commodity complex.
Natural Gas
NBP and TTF eased on Wednesday as easing Middle East tensions drew risk premium out of the curve and forecasts pointed to temperatures 7 to 8 degrees above seasonal norms over the coming bank holiday weekend, reducing heating demand. NBP day-ahead settled at 126.00 p/therm, down 6.00 on the day, with front-month June around 120.71 p/therm and TTF day-ahead near €49/MWh, as selling pressure extended along the front of the curve. Supply offered a counterweight: Norwegian summer maintenance is curtailing significant volumes at Troll and Kollsnes, Langeled flows to the UK fell, and UKCS output dropped to around 84 mcm/day, leaving the system short and lifting storage withdrawals. EU storage sits near 37 per cent of capacity, below last year and behind the pace needed for the 90 per cent winter target, though heavy US LNG arrivals into north-west Europe continue to support a comfortable physical balance.
Electricity
UK baseload tracked gas and the wider complex lower yesterday, helped by strong wind output averaging 14.4 GW that lifted renewable supply and reduced reliance on gas-fired plant. Forward baseload contracts settled £2 to £3/MWh lower across the near curve, with Winter 26 around £102/MWh, while day-ahead baseload settled firmer at £114.36/MWh on near-term system tightness. Wind is now normalising and forecasts point to softer output next week, partly offset by strong solar, while nuclear availability remains weak, with Heysham, Torness, Hartlepool and Sizewell B all carrying outages and Sizewell B due to lose further capacity from tomorrow. Continental baseload moved in step, with German and French prices also easing on the improved weather and the unwinding risk premium.
Other Commodities
Crude led the complex sharply lower as the conflict premium unwound, with Brent settling $6.26 lower at $105.02 per barrel and WTI down a similar amount to $98.26 per barrel, after Iran coordinated the safe passage of 26 vessels through the Strait of Hormuz and the UAE confirmed progress on its Hormuz bypass pipeline. Coal also softened, with ARA CIF Cal-2027 down $2.70 to $125.90 per tonne. Carbon diverged from the trend, with EUAs firming to €75.40 per tonne and UK ETS allowances holding broadly steady. Asian JKM eased to around $18.9 per MMBtu but remains elevated on US outages and firm Asian demand, keeping competition for LNG cargoes in play, while sterling was little changed at 1.1553 against the euro.