Energy Market Analysis – 11/05/2026
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Power
The power market closely mirrored the volatility of the natural gas market throughout the period. Initially, European gas prices gained momentum, particularly in the front curve, driven by cooler weather forecasts bolstering heating demand and tighter storage levels. This translated directly to higher NBP power prices, reflecting increased gas costs. UK supply faced constraints due to reduced Norwegian flows and planned maintenance, further contributing to price increases. Demand forecasts indicated a peak in UK demand, amplifying the upward pressure on prices.
Although renewable energy output was slated to rise, the overall impact was muted by the relatively low gas storage levels in Europe. The market remained sensitive to geopolitical risks, with anxieties about potential disruptions to supply influencing forward prices. Later in the period, a slight softening in gas prices led to a decrease in UK power prices, although volatility persisted.
Gas
European natural gas prices experienced a fluctuating week, marked by initial gains followed by a partial retreat. Cooler weather and firmer demand initially propelled prices upwards, particularly in the front of the curve. Geopolitical concerns, underscored by ongoing tensions in the Middle East, added another layer of uncertainty. However, later in the week, the market saw a decline in spot prices across most contracts, with a partial recovery on Friday.
Unplanned maintenance events in Norway caused some supply disruptions, but these were ultimately offset by increasing exit nominations. UK demand was broadly in line with seasonal averages, influencing the near-term market dynamics. Storage levels remained a key factor, with near-full storage offering some support against price spikes. The overall sentiment was cautious, with traders acknowledging that substantial upside risk remained contingent on the continuation of geopolitical instability.