UK Energy Market Report - 3rd July 2026

UK wholesale gas and power firm for a fifth session as warmer weather, tight LNG competition and low European storage lift the front of the curve.

UK gas and power prices firmed again on Friday, with the front of both curves posting a fifth consecutive session of gains.

Day-ahead gas jumped 3.0 percent and prompt power spiked sharply, as a warmer weekend outlook, uncertainty over Qatari LNG shipments through the Strait of Hormuz, and cargoes diverting to Asia combined to tighten near-term supply.

The pattern remains familiar. Near-term and winter contracts are grinding higher, while the far end of the curve holds broadly flat.

For UK businesses weighing when to fix, the split between an expensive prompt and a calmer 2028 to 2029 outlook is worth watching closely.

Gas Market

NBP day-ahead gas settled at 104.50 p/therm, up 3.0 percent on the day. The August front-month contract was almost level with it at 104.51 p/therm, up 2.7 percent.

That flat prompt-to-front-month shape points to a market pricing near-term tightness rather than a structural supply problem.

Further out, Winter 26 gas rose 1.9 percent to 108.80 p/therm and Q4 26 added 2.1 percent to 109.73 p/therm. The seasonal premium into winter is now firmly established, with Summer 27 sitting far below at 79.39 p/therm.

Three drivers are underpinning the strength.

Global LNG flows continue to favour Asia over Europe, with JKM holding a premium over both TTF and NBP and pulling flexible cargoes east. Egypt is importing LNG at record levels, intensifying the competition for spot cargoes.

A warmer outlook across the UK and Europe through the weekend and into next week is also lifting near-term demand expectations.

TTF, the European benchmark, told the same story. The Dutch front-month contract rose 2.8 percent to €44.02 per MWh, with day-ahead close behind at €43.91.

On the system, National Grid forecast NTS demand at 136.24 mcm, around 5.68 mcm below seasonal normal, with the system marginally long at plus 6.43 mcm. That soft physical balance sits at odds with the firmer paper market, a reminder that this rally is driven by sentiment and forward risk rather than a here-and-now shortage.

Electricity Market

Prompt power was the standout mover. UK day-ahead baseload settled at £89.97 per MWh, up 39.7 percent, while day-ahead peak power rose 67.2 percent to £81.86 per MWh.

Those percentage swings look dramatic, but they reflect a bounce from a very soft recent print rather than a sustained repricing of the curve.

The forward curve moved far more modestly. The August baseload contract rose 1.6 percent to £94.37 per MWh and Winter 26 baseload added 1.3 percent to £98.21 per MWh. Winter 26 peak power holds a healthy premium at £113.10 per MWh.

The far end stayed soft, with Summer 27 baseload easing 0.2 percent to £75.21 per MWh.

Renewables should cap some of the upside into next week. Wind generation is forecast to build toward 13.5 GW and solar toward 10 GW at midday, against a forecast peak demand of just 26.9 GW.

That points to comfortable oversupply for much of the day, with the grid operator expecting 52 percent of periods to be oversupplied.

Oil, Carbon and Global Commodities

Brent crude was steady at $71.80 per barrel, up 0.3 percent, offering little independent push to gas or power. Carbon offered little direction either, with UK Allowances up 0.5 percent and EU carbon essentially flat.

Storage and Supply Outlook

The bigger structural story sits in storage. European aggregated gas stocks stand at just 49.22 percent full, tracking around 9.92 percent below this time last year and 18.94 percent below the five-year average.

On historic injection rates, storage is projected to reach only around 71.33 percent by 1 October, well short of the levels Europe has grown used to entering winter.

That gap is the single most important reason the winter contracts carry the premium they do, and why any disruption to LNG supply moves the market quickly.

For now there is no fresh military escalation around the Strait of Hormuz, but indirect US-Iran talks remain difficult. Reports suggest Washington offered to unfreeze up to 100 billion dollars of Iranian assets in return for dropping proposed transit fees through the Strait, an offer Tehran rejected.

Continued friction for vessels transiting the Strait keeps a risk premium in the price.

What This Means for Your Business

The market continues to reward buyers who separate the prompt from the curve. This week’s gains are concentrated in day-ahead and winter delivery, driven by weather and LNG competition, while the 2028 and 2029 contracts remain calm and comparatively cheap.

If your business is exposed to this winter, the combination of low European storage and tight LNG competition argues for caution. Waiting for a pullback carries real risk while stocks stay below average and the Hormuz situation is unresolved.

For longer-dated requirements, the softer far curve offers more room to be selective. Layering cover across multiple seasons, rather than fixing everything at today’s elevated winter prices, remains the sensible approach for most flexible buyers.

Every business has a different risk profile, contract shape, and appetite for exposure. If you would like a view on how these movements affect your own renewal or hedging position, speak to one of our energy consultants today.

Previous report: UK Energy Market Report – 30 June 2026