Energy Market Analysis – 01/06/2026
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Power
European power prices displayed mixed momentum throughout the reporting period, gaining value by 28 May amid supportive renewables generation. UK wind output peaked near 6.9 GW on 26 May, with German generation reaching 14.3 GW, reflecting consistently above-average wind conditions. Warmer temperatures across Europe continued reducing heating demand, further pressuring spot prices despite gains in forward positions.
On the final day of front-month trading, the power market opened higher following US–Iran tensions, before reversing intraday on constructive ceasefire headlines and the provisional reopening of the Strait of Hormuz. However, volatility reflected broader uncertainty surrounding geopolitical developments and their implications for European energy balances.
The latest weather forecasts indicated temperatures would remain largely above seasonal norms until 5 June, thereafter lifting once more. Wind speeds in the UK were characterised as “choppy” but generally expected to remain around or above averages throughout the coming weeks, providing sustained support for renewable-based power generation. Power contract liquidity remained notably thin across the curve, limiting trading activity. Fundamentals continued reflecting the interplay between benign weather conditions and geopolitical risk premiums embedded in broader energy markets.
Gas
European natural gas prices softened significantly between 26–28 May, driven by milder weather, improved Norwegian supply and robust wind generation. The UK NBP day-ahead contract fell to 112 p/th by 28 May—its lowest level in early May—whilst the Dutch TTF declined to €46.05/MWh. Temperatures remained well above seasonal norms (6.6°C above average on 26 May, easing to 4.8°C above by 27 May), suppressing demand to approximately 128 mcm/day by 27 May.
Norwegian supply improved initially, reaching 289.9 mcm/day on 26 May before moderating due to maintenance work, with 46–48 mcm/day directed to the UK. Total European exports stabilised around 292–294.8 mcm/day. UK Continental Shelf receipts remained modest at 83–87 mcm/day, whilst LNG send-out fluctuated between 10–12 mcm/day.
The forward curve demonstrated resilience despite spot weakness, reflecting ongoing geopolitical tensions. Middle Eastern instability and uncertainty surrounding the Strait of Hormuz sustained premium levels, though a provisional 60-day ceasefire agreement provided temporary relief. With warm weather expected to persist until early June before gradually cooling, near-term demand pressures remained limited, whilst Asian LNG demand and Middle Eastern risks continued supporting longer-dated valuations.