Energy Market Report - 28 August 2026
Geopolitics reasserted itself over the European energy complex this week, with gas and power curves pushing higher as the prospect of an early reopening of the Strait of Hormuz receded and fresh Norwegian supply outages compounded an already tight winter picture. Oil rose on the day but remains lower on the week, while carbon eased in both the European and UK schemes.
Natural Gas
Gas prices rose sharply because supply tightened at the same moment the diplomatic route out of the Gulf disruption narrowed. UK NBP day-ahead settled at 166.50 p/therm, up 6.00 p/therm on the day, while TTF day-ahead rallied around 5 per cent to three-year highs. A compressor fault at Asgard removed roughly 7.2 mcm/day of Norwegian capacity, and planned maintenance at Sleipner began this morning, taking total Norwegian export nominations 15 mcm/day lower to 320 mcm/day and cutting UK-bound flows to around 65 mcm/day. The Sleipner works run to 22 September and are expected to cost around 11 mcm/day throughout. The forward curve rose with the prompt, Winter 26 gaining 5.63 p/therm to 169.26 and Q4-26 adding 5.80 to 171.17, with the monthly strip now peaking at 174.30 p/therm for January 2027 before falling away steeply into spring. LNG is the main offset: UK sendout is nominated at 9.7 mcm/day, South Hook has lifted output after two US cargoes this week, and ten vessels are scheduled into north-west Europe between today and 31 August. The structural weakness remains storage, with EU inventories at roughly 63.5 per cent and the injection season nearly over, while the force majeure on Qatari LNG has been extended again into mid-October.
Electricity
Power eased on the prompt but firmed across the curve, a split that reflects comfortable conditions now and a much tighter picture from November. UK day-ahead baseload settled £1.70 lower at £138.90/MWh as wind held up and late-summer demand stayed light, with day-ahead peak at £136.06/MWh settling below baseload on strong midday solar. The balancing market showed where the real stress sits: prices reached £264/MWh during Thursday's evening ramp before collapsing to £127/MWh by 21:30, and this morning the system has run long with prices down to £106.25/MWh by 09:00. Forward contracts moved the other way, with Q4-26 up £2.74 to £138.00/MWh and Winter 26 up £2.29 to £137.67/MWh, and the monthly board peaking at £141.68/MWh in November rather than midwinter, which points to firm capacity rather than weather as the binding constraint. UK nuclear availability is a growing concern, with Hartlepool 1 fully offline, Hartlepool 2 and Heysham 2-7 on unplanned reductions, and Heysham 2-8 due off for 80 days from 4 September. On the Continent, French nuclear output has fallen to around 34 GW amid strike action at Chinon and outages at Gravelines 3 and Chooz, with low river levels simultaneously restricting hydro, leaving French Q4-26 at €128.09/MWh and German Q4-26 at €150.37/MWh.
Other Commodities
Brent M+1 settled $1.86 higher at $89.70/bbl and WTI added 1.58 per cent to $83.53/bbl, though both remain roughly 4 per cent lower on the week as the market continues to discount the risk of an extended Gulf closure, with reports of continued attacks on Saudi-linked shipping in the Red Sea providing a second source of route risk. API2 ARA coal for Cal-27 gained $2.16 to $128.99 per tonne. Carbon softened in both schemes, EUA Dec-26 easing €0.26 to €82.42 per tonne while UK ETS Dec-26 fell £0.64 to £59.00 per tonne, a proportionally larger move that widened the UK discount to roughly €13.61 per tonne on a converted basis. In LNG, JKM M+1 rose to $23.41/MMBtu and holds a clear premium over north-west European LNG at $20.50/MMBtu, while Henry Hub sat at $2.91/MMBtu, an arbitrage that should keep US cargoes flowing towards the Atlantic basin as export capacity returns from maintenance through September. Sterling was little changed at 1.1663 against the euro and 1.3592 against the dollar, contributing nothing material to import-priced commodities.