UK Energy Market Report - 14 July 2026
Hormuz tensions and a mid-July heatwave lift the front of the gas and power curves, while long-dated contracts hold in steep backwardation.
UK wholesale energy prices opened the week firmly higher, with the front of both the gas and power curves rallying on renewed Middle East supply risk and a mid-July heatwave.
NBP day-ahead gas settled at 124.00 p/therm on 13 July, up 6.70 p/therm on the session, while UK day-ahead baseload power gained 6.76 to close at 113.71 £/MWh.
Longer-dated contracts moved far less, leaving the curve in steep backwardation and concentrating the risk premium at the prompt.
Gas Market
The prompt led the rally. NBP day-ahead rose to 124.00 p/therm and the Dutch TTF front-month settled around 51 €/MWh, up roughly 2.9 €/MWh on the day.
Geopolitics did most of the heavy lifting. Reports of reduced vessel traffic through the Strait of Hormuz, fresh US-Iran escalation over the weekend, and a proposal from President Trump to impose a 20% transit fee on cargoes passing through the waterway all added a bullish risk premium to global gas.
The measure would lift the delivered cost of Gulf LNG and oil, and raises questions over future cargo availability. The JKM premium to TTF widened further, a sign of intensifying competition for seaborne cargoes.
Weather reinforced the move. Forecasts point to above-normal temperatures across northwest Europe through mid-July, supporting cooling demand and gas-fired generation. UK demand is forecast at 144 mcm/day on 14 July, broadly in line with seasonal norms.
Supply remains healthy. Norwegian flows held strong at around 325 mcm/day, with Langeled into the UK up 4.2 to 56.9 mcm/day. That said, Norwegian flows to the Continent slipped about 3 mcm/day as gas was redirected towards Britain, Isle of Grain LNG send-out eased to 2.8 mcm/day, and lower French LNG nominations for 15 to 31 July are expected to trim the balance by around 2 TWh.
| Contract | Price (p/therm) | Change (week) |
|---|---|---|
| Day-Ahead | 124.00 | ▲ +6.70 |
| Aug-26 | 124.15 | ▲ +6.96 |
| Q4-26 | 127.10 | ▲ +6.64 |
| Winter-26 | 125.25 | ▲ +6.50 |
| Summer-27 | 89.02 | ▲ +4.01 |
| Winter-28 (long-dated) | 71.49 | ▲ +0.24 |
Electricity Market
Power tracked gas higher. UK day-ahead baseload settled at 113.71 £/MWh, up 6.76 on the session, with the day-ahead peak at 104.76 £/MWh.
A tight generation stack amplified the move. Nuclear availability is unusually low, with Heysham 1 unit 2 and Hartlepool unit 1 both on unplanned outages and both Sizewell B units offline, leaving combined-cycle gas plant to fill more of the gap just as gas prices rose.
Wind and solar output is forecast around seasonal norm, near 8 to 11 GW across the week, which offers some relief but not enough to offset the nuclear shortfall during peak hours.
The forward curve mirrors gas. Winter-26 baseload sits at 108.96 £/MWh and Q4-26 at 110.49, while Summer-27 falls to 80.13 and Winter-28 to 70.23, a clear backwardation.
Balancing prices stayed volatile. The maximum system buy price reached 152.50 £/MWh on 14 July, after spiking to 220 £/MWh the previous day.
Oil, Carbon and Global Commodities
Brent crude led the commodity complex, jumping 7.29 dollars to 83.30 dollars per barrel as the Hormuz headlines took hold. Carbon and coal firmed more modestly.
| Commodity | Price | Change (week) |
|---|---|---|
| Brent Crude (M+1) | $83.30/bbl | +$7.29 |
| Coal API2 (Cal-27) | $118.52/tonne | +$4.10 |
| EUA Carbon (Dec-26) | €80.11/tonne | +€0.91 |
| UK ETS (Dec-26) | £57.08/tonne | +£0.68 |
| JKM LNG (front-month) | $18.61/MMBtu | +$1.04 |
Sterling softened, with GBP/EUR easing to 1.1719 and GBP/USD to 1.3346. A weaker pound adds marginally to the cost of dollar-denominated imported energy.
Storage and Supply Outlook
European gas storage has recovered to around 52% full as of 11 July, better than earlier in the summer but still short of the comfortable buffers seen in recent years.
The persistently weak summer-winter spread continues to cap storage economics, giving traders little incentive to inject aggressively into the shoulder season.
On the UK system, demand is running near 130 mcm/day with strong Norwegian imports offsetting a 2 mcm/day dip in domestic production. Planned Norwegian maintenance at Easington, Langeled and Vesterled remains on the schedule and is worth watching into the autumn.
Near-term risk is skewed to the upside on geopolitics and weather. Winter contracts remain capped by the expectation that LNG flows normalise before the peak demand season, though that assumption has yet to be tested.
What This Means for Your Business
The shape of the curve is the story. The market is pricing most of its risk into the prompt and Winter-26, while seasons two and three years out sit far lower, with Summer-27 gas near 89 p/therm and Winter-28 near 71 p/therm.
For businesses renewing on a fixed price right now, that means capturing an elevated front of the curve driven by a geopolitical spike that may or may not persist. It is worth weighing whether to fix the full term today or stagger cover.
Flexible and basket buyers are better placed. Spikes like this are a reminder to have tranche triggers ready, so you can lock volume on pullbacks rather than chase a rising prompt.
Either way, the deep backwardation is a genuine opportunity for buyers who can look beyond next winter, and a reason to review your procurement strategy before the next headline moves the market.
To review your position against today’s curve, speak to one of our energy consultants today.
Previous report: UK Energy Market Report, 13 July 2026
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