Energy Market Analysis – 03/08/2026
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Power
UK baseload prices fell sharply on Monday alongside gas, as easing US-Iran tensions reduced the geopolitical risk premium that had been supporting the curve. Front-end contracts weakened most noticeably, though limited liquidity allowed some back-end contracts to firm marginally. Wind generation was marginally above seasonal norms following a strong weekend, though output was expected to decline from Wednesday, while solar remained well above normal. Tuesday saw power prices continue lower across the curve in line with gas, as milder weather forecasts and improved sentiment around the Strait of Hormuz weighed on near-term demand expectations. Lower wind output in both the UK and Germany provided a partial offset. Wednesday saw baseload track gas modestly higher, though liquidity remained thin.
Wind generation was forecast to remain below seasonal norms for the coming week, with solar output gradually softening towards seasonal levels as cloudier conditions approached. Thursday brought a divergence, with UK Base and Peak spot contracts strengthening even as further-out contracts moved lower in line with weaker gas. Renewable generation across Europe was forecast to peak at around 117 GW, below the 150 GW-plus levels seen earlier in summer. By Friday, baseload was trading broadly sideways alongside gas. Nuclear availability had improved recently, with a further increase expected the following week, while wind remained weak and solar output stayed strong.
Gas
UK NBP prices fell sharply on Monday as reports emerged that Iran would suspend attacks if the US did likewise, with easing geopolitical tensions weighing heavily on the curve. The system opened 20 mcm/day long, though LNG sendout fell 3 mcm/day and Langeled nominations eased slightly. Tuesday extended the decline, with TTF Day-Ahead settling at €56.38/MWh and NBP falling to 135.86p/th, both around 3% lower. Norwegian flows held steady at 325.7 mcm/day, though European LNG nominations dropped over 40% day-on-day to around 290 mcm/day. EU storage stood at approximately 56% full, more than 12 percentage points below year-ago levels, with July injection rates running roughly 20% below the same period last year. Wednesday saw prices recover slightly, with Norwegian nominations stable at 325.1 mcm/day, though UK-bound flows fell 4 mcm/day via Langeled and Vesterled.
LNG sendout dropped sharply to just 1 mcm/day, with only one cargo scheduled for arrival. Iran’s rejection of Oman’s Strait of Hormuz management proposal and renewed regional military activity pushed oil prices higher. Thursday brought further modest softening, with NBP month-ahead falling around 3.7%, though LNG nominations improved to 222 mcm/day. By Friday, prices were broadly flat, with Norwegian nominations steady at 327.2 mcm/day and a drone strike on gas vessels at Egypt’s Damietta port introducing fresh Suez Canal risk.