Snapshot - 18 August 2026
Wholesale energy prices moved higher again on Monday, driven almost entirely by geopolitics rather than by anything happening on the supply side. The expiry of the US-Iran memorandum without agreement, combined with the continued closure of the Strait of Hormuz, pushed traders to add risk premium to winter delivery. Gas contracts firmed modestly across the prompt and near curve, while crude rose more than two and a half per cent.
Power was the standout mover. UK day-ahead baseload rose by close to twelve per cent as wind generation collapsed, leaving the grid heavily reliant on gas-fired plant and imports, and balancing prices spiked well above £300/MWh in the early hours before falling back sharply through the afternoon. Forward power followed gas higher but with noticeably less conviction, and the far end of both curves was flat to slightly softer, steepening the discount already priced into 2028 and beyond.
Elsewhere, coal was little changed at the front and weaker further out, carbon was broadly flat with EU allowances easing and UK allowances edging up, and sterling gave no meaningful direction. European storage remains the standing concern, sitting around sixty per cent full with Germany and the Netherlands both lagging, and the shape of the forward curve continues to discourage the injections needed before winter.
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