Energy Market Report - 26 May 2026
Wholesale gas and power prices fell sharply into the long weekend as record May heat and strong renewable generation cut demand against a well-supplied market. Crude was the exception, firming this morning as renewed US-Iran tension offset an otherwise bearish tone across the energy complex.
Natural Gas
UK and continental gas prices dropped on Friday and opened lower again this morning, driven by exceptional warmth across North-West Europe - the UK recorded its hottest May day on record at 34.8°C - which suppressed demand and boosted solar output. NBP day-ahead settled around 5.5 per cent lower at 116.9p/therm and the Dutch TTF day-ahead fell around 3 per cent to near €47.9/MWh, while front-season Winter-26 eased toward 118p/therm. Supply remained comfortable, with Norwegian nominations near 289 mcm/day, higher UKCS output and steady LNG send-out, although low storage across the UK and Continent and QatarEnergy's extended LNG force majeure lend some background support.
Electricity
UK power followed gas lower, with day-ahead baseload down around 6.4 per cent to 99.46 £/MWh and front-season Winter-26 easing to around 101 £/MWh. Abundant renewable output was the key driver, with German solar near 20 GW pushing gas-fired generation there below 2 GW and UK solar running strongly, while heat does not lift British demand as sharply as on the Continent owing to limited air conditioning. The forward curve proved more resilient, supported by firmer carbon and a heavy slate of UK nuclear outages - including units at Heysham, Hartlepool and Torness and both Sizewell B reactors - with wind forecast to weaken next week.
Other Commodities
Brent crude firmed around 2 per cent to near 103.5 dollars per barrel, recovering after several sessions of decline as US strikes in southern Iran and stalling negotiations restored some geopolitical risk premium, with WTI following suit. Coal was little changed, with ARA CIF Cal-27 around 125 dollars per tonne. In carbon, EU Allowances for December-26 firmed around 2 euros to near 77 euros per tonne, lending support to European power, while UK ETS contracts traded thinly; the Asian JKM benchmark held near 18.8 dollars per MMBtu, a modest premium to TTF that offers little pull on Atlantic cargoes. Sterling was broadly flat at around 1.157 against the euro and 1.343 against the dollar.