Monday was a heavy sell-off driven entirely by geopolitics rather than anything physical. Signals that the US and Iran were edging towards talks, including suggestions that Tehran might guarantee safe passage through the Strait of Hormuz, pulled risk premium out of every energy market at once. UK gas fell by close to nine per cent across the prompt and near curve, with day-ahead settling in the low 230s p/therm from the low 250s, and crude lost more than ten per cent to sit just above $100/bbl. Forward power followed gas down by roughly six to eight per cent across the next four quarters. The one exception was carbon, which firmed to its strongest level in around three years.
Prompt power did not join in. Day-ahead baseload held broadly flat in the low £200s/MWh and the day-ahead peak firmed, because the near-term driver is cold weather, below-normal wind and limited import cover rather than headlines. Half-hourly prices showed that tension plainly, with Monday evening’s ramp pushing system prices to the top of the £300s/MWh range before a long, well-supplied overnight period dragged them back to the mid £150s/MWh. French interconnector capacity is restricted until the middle of this month and several UK nuclear units are offline, so evening peaks remain the pressure point.
Physically, the UK is in better shape than the price level suggests. LNG send-out has risen several-fold from October’s levels and a steady run of mostly US cargoes is arriving into north-west Europe, which is offsetting extended Norwegian outages at Oseberg and Asgard. Storage remains the soft spot, and the forward curve’s unusually flat summer-2027 shape says the market does not expect refilling to be cheap. The whole move has already partly reversed this morning on reports of overnight US strikes in the Strait of Hormuz, with gas and power both indicated higher.
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