Energy Market Report - 28 July 2026
European energy markets fell sharply on Monday as a pause in US strikes on Iran, and the absence of further disruption to shipping through the Strait of Hormuz, prompted traders to unwind a substantial portion of the geopolitical risk premium accumulated over the preceding fortnight. Gas led the move, with power and the wider commodity complex following, though declines were concentrated at the front of the curve where the premium had been most heavily concentrated.
Natural Gas
Prices fell because the market repriced risk, not because anything changed in the physical balance. NBP day-ahead settled at 139.30 p/therm, down 12.45 p/therm or around 8 per cent, with August 26 at 140.76 p/therm and Q4-26 at 144.76 p/therm. Winter 26 gave up 11.86 p/therm to 141.67, wiping out a full week of gains and returning the contract to its 20 July level. Contracts further out fell far less, with Summer 27 down 5.77 p/therm to 96.55 and Winter 28 down under 2 p/therm to 75.70, because the reasons to be nervous about winter supply have not gone away. TTF day-ahead was assessed around €58/MWh against €63.15 on Friday, leaving NBP roughly 7 p/therm cheaper than the Dutch hub. Supply was unremarkable. Norwegian pipeline nominations reached approximately 325.4 mcm/day, Langeled flows to the UK rose 4.70 mcm/day to 58.30, UKCS production eased to 95.30 mcm/day and UK LNG sendout held steady at around 8 mcm/day. EU storage stood near 55.4 per cent full on 26 July, still short of the level normally seen at this point in the injection season, and that deficit remains the principal support beneath the forward curve.
Electricity
Power tracked gas lower but resisted the full move, because the generation stack is genuinely tight. Winter 26 baseload settled at £121.22/MWh, down £7.03, and Q4-26 at £123.30/MWh, moves of around 5.5 per cent against gas declines closer to 8 per cent, which widened front-month clean spark spreads by roughly £5/MWh. Around 3.1 GW of nuclear capacity is fully unavailable, with unplanned outages at Heysham 1, Hartlepool 1 and Heysham 2 alongside planned work at Sizewell B, and Torness 2 enters an 18-day planned outage from 31 July. Interconnector imports averaged approximately a quarter of the generation stack over the past week, leaving UK prices unusually sensitive to continental cooling demand. Day-ahead settlements were shaped by solar rather than scarcity, with baseload at £121.36/MWh and peak below it at £105.03/MWh, an inversion caused by strong midday output. The weekend saw system prices fall as low as minus £38.05/MWh, while the Monday evening ramp still cleared at £184.75/MWh. Wind is forecast to dip below seasonal norms tomorrow before improving late next week.
Other Commodities
Crude fell for a third consecutive session, with Brent M+1 settling at $88.36/bbl, down $8.42 or 8.7 per cent, having traded close to $100 a week earlier. The retreat is sentiment-driven, and the IMF has cautioned that the spare capacity, demand compression and inventory buffers that absorbed the initial conflict shock are now largely exhausted, leaving little cushion should hostilities resume. API2 ARA coal for Cal-27 eased $3.22 to $122.75/tonne. Carbon softened but by less than the fuels, with EUA Dec 26 down €1.07 to €82.33/tonne and UK ETS Dec 26 effectively unchanged at £59.85/tonne, narrowing the UKA discount to roughly £10.50/tonne and raising carbon's share of marginal CCGT cost. In global gas benchmarks JKM M+1 fell $0.57 to $21.43/MMBtu and Henry Hub spot dropped to $2.63/MMBtu, with JKM holding a premium of close to $3/MMBtu over NBP spot at $18.51/MMBtu, enough to keep Atlantic cargoes competing for Asian buyers. Sterling was marginally softer at 1.1693 against the euro and 1.3287 against the dollar.