Energy Market Report - 27 July 2026
A reported pause in hostilities between the United States and Iran has triggered a sharp correction across European energy markets this morning, unwinding much of the risk premium accumulated during an eight-session rally. Gas has fallen furthest, power has followed more cautiously, and crude has given back a substantial part of last week's gains while coal has continued to firm.
Natural Gas
Prompt and near-curve gas is falling because the market is pricing out a supply disruption that has not materialised. Friday's session settled higher again, with day-ahead NBP at 151.75 p/therm and Winter 26 at 153.53 p/therm, but with no further interruption to shipping through the Strait of Hormuz and US strikes reported on hold, front-month NBP is indicated around 143.93 p/therm this morning and Winter 26 at 144.87 p/therm. Continental markets moved in step, with TTF spot at €63.15/MWh. The physical picture supports the softer tone: the UK system opened around 20 mcm/day long, Norwegian exit nominations firmed to 323.3 mcm/day despite maintenance at Dvalin, and linepack has rebuilt to 349.66 mcm. What has not changed is the inventory position. EU storage stood at roughly 54.6 per cent full on 22 July, some 11 percentage points below last year, and the steep discount of summer 27 contracts to winter 26 continues to make injection uneconomic, which is why the curve beyond March 27 has barely moved even as the prompt has fallen. Only one of the ten LNG cargoes scheduled into Northwest Europe through 9 August is UK-bound, arriving at Milford Haven on 30 July.
Electricity
Power softened alongside gas but held more of its ground, because the constraints behind it are physical rather than geopolitical. Friday's day-ahead baseload settled at £78.04/MWh with peak at £28.10/MWh, figures that reflect weekend delivery against strong solar output rather than any market signal; today's prompt is back at £117.71/MWh. Sunday illustrated the summer pattern starkly, with system prices negative through the middle of the day, bottoming near -£31/MWh, before the evening ramp lifted them to £165.00/MWh. On the curve, Friday settled Aug-26 baseload at £126.48/MWh, Q4-26 at £130.83/MWh and Winter 26 at £128.25/MWh, with current offers roughly £3 to £4/MWh lower. Supply-side risk is doing the work here. Both Sizewell B units, Hartlepool 1, Heysham 1 unit 2 and Heysham 2 unit 7 are unavailable, with Torness 2 entering a planned outage on 31 July, while French nuclear availability remains restricted by maintenance and temperature limits. Imports are supplying around a quarter of British demand and the system operator has issued repeated warnings of exceptionally high peak-period prices. Wind is marginally above normal today but is forecast to fall away from Wednesday.
Other Commodities
Crude led the retreat, with Brent M+1 settling at $96.78/bbl on Friday, down 3.88 per cent, and WTI at $89.31/bbl, before both extended lower this morning on reports placing Brent back below $90/bbl. Both nonetheless remain close to 10 per cent higher over the week, and OPEC+ has approved a further output increase from August that members are widely reported to be unable to deliver while Gulf export routes stay constrained. Coal diverged, with API2 ARA CIF Cal-27 firming $1.47 to $125.97/tonne and gaining 3.65 per cent on the week, a move that lifts dark spreads and offers indirect support to thermal power pricing. Carbon eased on both schemes: EUA Dec-26 settled at €83.40/tonne, down €0.48, while UK ETS Dec-26 fell £1.50 to £59.83/tonne, widening the UK discount to roughly €13/tonne. In global gas benchmarks, JKM held at $22.00/MMBtu, up 4.84 per cent on the week, against Henry Hub at $2.87/MMBtu, a spread wide enough to keep Asian buyers competitive for Atlantic cargoes. Sterling was little changed at 1.1711 against the euro and 1.3319 against the dollar.