Energy Market Report - 22 July 2026
The deepening conflict between the US and Iran kept energy markets on the front foot, driving European gas to fresh four-month highs with power, oil and coal following. Carbon eased slightly against the trend, while sterling softened against both the euro and the dollar.
Natural Gas
Gas prices rose again on Tuesday and have extended this morning, with the market focused squarely on the Middle East after an eleventh consecutive night of strikes between the US and Iran and continued threats to shipping through the Strait of Hormuz. NBP day-ahead settled at 142.50 p/therm and the August contract, which ended Tuesday at 144.57 p/therm, is trading near 149 p/therm this morning - up around 30 p/therm since 10 July - while TTF has pushed back above €60/MWh. Beneath the headlines the picture is more mixed: the UK system remains comfortable, supported by UKCS production near 97 mcm/day and steady exports of around 51 mcm/day to the Continent, but Norwegian deliveries dipped day on day, European LNG imports have slowed to roughly 214 mcm/day in July from 260 mcm/day in June, and EU storage sits near 53 per cent full - about 10 percentage points below last year - raising doubts over the pace of the winter rebuild.
Electricity
UK power tracked gas higher along the curve, although day-ahead baseload settled £2.03 softer at £125.37/MWh on Tuesday before this morning's indications turned sharply higher as wind output falls to around 3.9 GW, its lowest in two weeks. August 26 baseload settled at £120.25/MWh and is offered around £5 higher today, with Winter 26 at £122.76/MWh. Supply-side pressure is building: more than 3 GW of UK nuclear capacity is offline following an unplanned outage at Heysham 2-7, and on the Continent reported heat-related restrictions at five French reactors, hydro stocks around 10 per cent below last year and a fading wind outlook have driven French forward power up sharply on the week, with German August baseload around 6 per cent higher over the same period. Interconnectors remain oriented towards imports with the UK priced at a premium to neighbouring markets.
Other Commodities
Brent extended its rally, settling $1.79 higher at $91.01/bbl on Tuesday - up more than 7 per cent on the week - with WTI at $84.34/bbl, as the market priced continued risk to flows through the Strait of Hormuz. Coal firmed in sympathy, API2 Cal 27 rising to $124.45/tonne. Carbon moved against the wider complex, EUA Dec 26 easing to €83.20/tonne and UK ETS Dec 26 slipping to £61.31/tonne, leaving UK allowances at a discount of close to £10/tonne to their European counterparts. In global LNG, JKM firmed to $21.34/MMBtu - more than 10 per cent higher on the week - while Henry Hub was steady near $2.80/MMBtu, and sterling eased to 1.1736 against the euro and 1.3371 against the dollar.