Energy Market Analysis – 18/05/2026
Welcome to the Cibus Energy market analysis, detailing last week’s price changes, supply news, and movements in the electricity, gas, and oil markets. If you’d like to receive our energy market analysis directly to your inbox every Monday, then fill out this contact form to subscribe.
Power
The UK power market was characterised by limited liquidity and prices that largely mirrored the upward trajectory of the gas market. Baseload and Peak contracts saw gains, particularly in the near-term, driven by a combination of colder weather forecasts and shifting renewable generation patterns. At the start of the week, high wind and solar output provided some relief, keeping gas-for-power demand suppressed. However, by Tuesday, a notable decline in wind generation was forecast, which, alongside temperatures falling well below seasonal norms, increased the reliance on thermal generation.
While near-term contracts firmed, some longer-dated delivery periods, such as Summer-27 through Winter-28, surrendered value mid-week. Carbon prices also exerted an influence, with EUA allowances edging lower during the period. The market remained highly sensitive to the EC46 weather runs, which predicted a cold snap for the remainder of the week before a warmer trend from mid-May. By Friday, wind speeds were confirmed to be falling below seasonal averages, ensuring that baseload prices ended the week on a firm note. Despite the thin trading volumes, the interplay between falling renewable output and a bullish gas curve remained the primary driver for UK power throughout the week.
Gas
UK NBP gas prices exhibited significant volatility, ending the week firmer as supply concerns and unseasonably cold weather dominated the narrative. Prices initially rose on Monday due to a short system and reduced Norwegian flows through the Langeled pipeline. Although a brief mid-week dip occurred when the system opened long, bullish sentiment returned as EU storage levels were reported at just 35.72% capacity, significantly lower than the previous year. Daily storage injections fell by 32%, heightening anxieties regarding the winter refill programme.
Norwegian supply remained constrained throughout the week, further impacted by the commencement of maintenance at the Kårstø plant, while total exports fluctuated around 290–300 mcm/day. On the demand side, temperatures across Northwest Europe were forecast to drop more than 5°C below seasonal norms, increasing heating requirements. LNG activity remained relatively stable, though send-out nominations dipped towards Friday. Additionally, geopolitical instability in the Middle East, particularly concerning the Strait of Hormuz and US-Iran relations, bolstered oil prices and provided a supportive backdrop for the gas curve. By the week’s end, both spot and forward prices remained elevated amidst a consistently tight supply-demand balance.