Snapshot - 12 August 2026
Gas took a step back on Tuesday as reports of progress in the Iran-Oman talks over Strait of Hormuz shipping prompted traders to trim the risk premium that had built up on Monday. Front-month and Winter 26 contracts both gave up several pence, though day-ahead held up far better, and the curve is still sitting close to the highs of the past month. The physical backdrop has not changed: European storage is the weakest for the time of year in more than a decade, and the forward market continues to price a steep step down between the end of winter and the start of next summer.
Power went the other way. UK day-ahead baseload rose sharply into the mid-£130s/MWh despite the fall in gas, driven by weak wind and a heatwave that has lifted cooling demand. The intraday picture shows the shift clearly, with the midday floor that produced negative prices only last week now holding well above £60/MWh. Forward power was broadly flat, so generation margins improved across both the prompt and the coming winter. Continental supply is offering little help, with French nuclear constrained by heat and a jellyfish swarm, and Romanian and Hungarian reactors affected by record low river levels.
Elsewhere, crude firmed as fresh attacks on shipping undercut hopes of an early de-escalation, and coal held broadly steady. Carbon edged higher in both the European and UK schemes, with the UK allowance continuing to trade at a substantial discount to the European contract. Sterling was little changed. The market's immediate focus is this evening's solar eclipse, which will remove a meaningful slice of European solar output during the evening ramp and has already pushed today's prompt power offers sharply higher.
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