Daily Energy Market Report - 20th May 2026

Spot power falls 22% on warm weather and renewables surge, but forward gas contracts hold firm as Norwegian outage and Ichthys LNG strike loom

A tale of two markets opened the week. UK power spot prices fell more than 22% on Monday as warm temperatures and strong wind and solar generation reduced demand sharply, yet forward gas contracts barely moved, with the near-curve still holding above 122p/therm across all delivery periods.

The message from the market is clear: this week’s weather relief is welcome, but it does not resolve the structural supply risks that have driven prices to multi-week highs.

Gas Market – Forwards Hold Firm Despite Spot Relief

NBP day-ahead gas eased to 124p/therm, down 3.47% on Monday as warmer-than-normal temperatures, forecast at 6-7 -C above seasonal norms – reduced heating demand.

But forward contracts showed remarkable resilience. Jun-26 is holding at 123.30 (+8.7% on the week), Q3-26 at 122.97 (+9.2%), and Winter-26 at 123.25 (+6.9%).

The near-curve remains tightly bunched above 122, reflecting a market that is not yet willing to price in a sustained supply improvement.

Three structural pressures explain why. First, the Norwegian Continental Shelf: maintenance shutdowns at Kollsnes and Troll have removed approximately 280 million cubic metres of daily supply – a significant reduction at a time when the market needs every available cubic metre.

Second, the Hormuz disruption continues into its eightieth day, with Strait transit still severely constrained despite diplomatic noises from Washington.

Third, the Australian LNG situation at the Ichthys facility has shifted – industrial action has been deferred to 27 May while negotiations are scheduled for 25-26 May, but the threat has not gone away. If talks fail, a strike starting next Wednesday would hit global LNG supply at the worst possible time.

Cal-28 long-dated gas at 71.90 is barely changed on the week (+0.3%), continuing to represent a substantial discount to near-term contracts for businesses with the flexibility to contract further ahead.

Electricity Market – Spot Drops Sharply, Forwards Unmoved

UK power day-ahead spot fell 22% to £92.74/MWh on Monday, one of the sharpest single-session declines in recent weeks, driven by a combination of warm weather reducing demand and strong solar and wind output pushing low-cost generation into the system.

This is precisely the kind of weather-driven spot relief the market needed after last week’s near-18% spike.

However, forward contracts tell a different story. Jun-26 baseload is holding at £102.67/MWh (+5.1% on the week), Winter-26 at £102.65/MWh (+4.4%), and Cal-27 at £83.53/MWh (+0.7%).

The near-term power curve is still firmly anchored to gas prices rather than spot renewable output, and that is unlikely to change until the gas supply picture improves materially.

Oil, Carbon and Global Commodities

Commodity	Price	Change (day)
Brent Crude	$107/barrel	▼ -0.9%
WTI	$102/barrel	▼ -0.8%
EUA Carbon (Dec-26)	€75/tonne	–
JKM LNG (front-month)	$18.20/MMBtu	–
TTF Gas (front-month)	€47.50/MWh	▼ -0.5%

Brent crude has eased slightly to around $107/barrel as President Trump’s decision to allow diplomatic talks with Iran pulled back some of the recent geopolitical risk premium.

WTI has followed suit. This is a modest softening rather than a meaningful reversal, the Strait of Hormuz remains effectively closed to commercial LNG transit, and without a substantive peace agreement, the supply disruption continues.

Storage, Supply and the Critical Week Ahead

UK gas storage remains at approximately 10% capacity. The warmer temperatures forecast for this week will reduce injection competition from household demand, providing a modest window for storage operators to begin building stocks, but the scale of the deficit means meaningful recovery will take weeks, not days.

The week ahead carries two pivotal events. Negotiations at the Ichthys LNG facility in Australia are scheduled for 25-26 May.

If they fail to reach agreement, strike action begins on 27 May, and markets will be watching closely. And on 27 May, Ofgem publishes its July price cap determination.

Forecasters expect a rise of around £217 per year for typical domestic consumers.

While commercial contracts are not subject to the cap, the announcement will reinforce the broader narrative of a market under sustained upward structural pressure.

What This Means for Your Business

Monday’s spot power drop is good news for businesses on flexible or pass-through contracts, today’s consumption will cost less.

But for businesses looking at contract renewals, the relevant prices are in the forward curve, and there the picture is unchanged.

Gas near-curve contracts are up 29-30% over the past month. Power forwards are up 20%. These are the rates that will apply to your next fixed contract.

This week is actually a useful moment to act. The slight easing of geopolitical risk premium and the weather-driven demand reduction have taken some of the immediate panic out of the market, but the structural drivers (Norwegian outage, Ichthys LNG risk, UK storage at 10%, Hormuz disruption) have not been resolved.

If anything, the deferral of the Australian strike to 27 May means there is one week of additional uncertainty ahead rather than clarity.

Businesses whose contracts are expiring in the coming months face a difficult choice between fixing at current elevated rates or waiting in the hope of improvement.

Our view: the risks on the upside still outweigh the potential for near-term relief. Speak to one of our consultants today – understanding your specific position is the first and most important step.