UK gas prices ease on Iran diplomatic progress, but Norwegian outages and the Ichthys LNG threat keep the forward curve elevated ahead of the bank holiday weekend.

UK gas prices eased 2-3% on Thursday 21 May as progress in US-Iran nuclear negotiations reduced the geopolitical risk premium that has been supporting the forward curve since late February.

Day-ahead NBP fell to around 121p/therm as traders took profits, with near-curve contracts following suit.

The retreat is expected to be shallow, however: Norwegian field maintenance across Kollsnes, Troll and Asgard is removing a significant volume of supply, and workers at Australia’s Ichthys LNG facility remain on course to begin industrial action on 27 May unless bank holiday weekend talks produce a settlement.

With temperatures running 6-7°C above seasonal norms and a UK bank holiday weekend approaching, demand-side pressure is easing, but the structural supply picture has not materially changed.

Gas Market

Day-ahead NBP gas eased to approximately 121p/therm on Thursday, down around 2.5% on the day, as US-Iran talks entered what the White House described as their “final phase.” The diplomatic progress encouraged profit-taking across the near-term curve, with June-26 contracts retreating to around 119.50p and Q3-26 easing to 117.20p/therm.

Despite the daily pullback, near-term prices remain substantially elevated compared to a month ago, Q3 contracts are up roughly 25-30% over that period.

The daily move reflects sentiment, not a structural resolution. Norwegian maintenance across three major fields – Kollsnes, Troll and Asgard, continues to remove around 280 mcm/day from supply.

Langeled nominations into the UK are easing as Norwegian gas is redirected toward continental buyers.

Winter-26 contracts settled around 119p, with the market pricing in ongoing supply risk as the injection season progresses.

Cal-28 gas held around 71.40p/therm, reflecting the long-dated market expectation of a gradual return toward more normalised supply as the current geopolitical premium unwinds.

The Ichthys LNG situation remains unresolved. Strike action is now scheduled from 27 May, the same day as the Ofgem price cap announcement, with talks planned for 25-26 May over the bank holiday weekend.

A failure to reach agreement could send prompt gas sharply higher when UK trading resumes on Tuesday.

Electricity Market

Day-ahead baseload power settled around £90/MWh, easing from the previous session as warmer-than-seasonal temperatures suppressed residential and commercial demand and wind output began recovering after Monday’s low of 4.8 GW.

Solar generation was performing well given the clear, sunny conditions, while CCGT plant continued to run at approximately 35% of the generation mix to meet residual demand.

With temperatures forecast to run 6-7°C above seasonal norms through the bank holiday weekend, demand is expected to soften further on Saturday and again on Monday.

This is already reflected in near-term power prices, which have retreated from their mid-week elevated levels.

Forward power contracts followed gas lower. Summer-27 baseload fell to around £74.86/MWh, down approximately 2.2% on the day.

The correlation between gas and power forward prices remains tight, CCGT is the marginal generator for much of the year, so when gas moves, power follows closely.

Oil, Carbon and Global Commodities

Brent crude steadied around $105.20/barrel on Thursday after a sharper 5% fall in the previous session, as Iran peace talks accelerated and the market began pricing in the possibility of Strait of Hormuz shipping routes reopening.

WTI crude also retreated, trading around $100.10/barrel.

A potential deal would involve the removal of blockades on commercial shipping through the Strait, where tanker traffic has been severely disrupted since March, though physical supply would take several weeks to reach end markets even if a deal is signed.

The UAE’s Hormuz bypass pipeline, which could reduce dependence on the Strait for Gulf oil exports, is now approximately 50% complete a medium-term positive for supply security.

EUA carbon fell modestly as lower gas prices reduced the marginal cost of gas-fired generation, easing the incentive to switch to coal.

TTF front-month gas fell to around €47.10/MWh, mirroring the NBP move and reflecting the same Iran-driven sentiment shift across European gas markets.

Commodity	Price	Change (day)
Brent Crude	$105.20/barrel	▼ -1.9%
WTI	$100.10/barrel	▼ -2.1%
EUA Carbon (Dec-26)	€65.40/tonne	▼ -0.8%
JKM LNG (front-month)	$14.20/MMBtu	–
TTF Gas (front-month)	€47.10/MWh	–

Storage and Supply Outlook

European gas storage continued its steady rebuild, now sitting above 36% capacity as LNG arrivals into north-west Europe remain elevated and largely US-sourced.

The warmer weather is pulling residential demand lower and supporting the seasonal injection trend. UK storage is contributing to the regional picture, though Norwegian maintenance outages mean the system is relying on LNG deliveries and continental interconnector flows to maintain balance.

The Ofgem Q3 2026 price cap announcement is expected on 27 May and is widely anticipated to include a significant upward revision, industry analysts have suggested an increase of up to £217 per year for domestic customers, reflecting the elevated wholesale prices seen over recent months.

While the cap does not directly affect commercial customers, it signals the direction of travel for the broader market and is likely to attract renewed media attention to energy costs next week.

What This Means for Your Business

Thursday’s easing offers a brief window in the near-term market, but the structural case for elevated prices has not gone away. Norwegian maintenance is a temporary but significant constraint, the Ichthys LNG situation may not resolve over the bank holiday, and Iran talks, however advanced, have not yet produced a signed agreement.

For businesses on flexible or unhedged contracts, the current pullback may be worth reviewing against your near-term exposure. For those considering forward purchasing, the curve remains meaningfully elevated compared to 30 days ago, near-term contracts are up 25-30% over that period, and the risk remains skewed upward: if Norwegian outages, Ichthys strike action and any Hormuz escalation coincide, the market could move quickly when trading resumes after the bank holiday.

If you haven’t reviewed your energy procurement strategy ahead of the Ofgem announcement on 27 May, this long weekend is a good time to do so. To discuss your options, speak to one of our energy consultants today.