Snapshot - 28 July 2026
Energy markets reversed sharply at the start of this week as the risk premium built up during the recent Middle East escalation came out in a single session. A pause in US strikes on Iran, with no further disruption to shipping through Hormuz, pushed UK gas down by around 8 per cent at the front of the curve. Prices further out fell far less, with contracts beyond next summer giving up only low single-digit percentages, leaving the shape of the curve intact even as the level came down.
Power followed gas lower but held up better, with front-season contracts easing by roughly 5 per cent against gas declines nearer 8 per cent. Generation-side tightness is doing the work there. A little over 3 GW of nuclear capacity is offline, with a further planned outage starting at the end of this week, and the UK has been leaning heavily on interconnector imports. Day-ahead settlements have been noisy rather than informative, with strong solar output producing negative prices over the weekend and pushing peak prices below baseload, while evening ramps still cleared well above £180/MWh.
Oil fell for a third consecutive session, dropping into the high $80s per barrel from close to $100 a week earlier, with coal and EU carbon also softer and UK carbon broadly flat. The direction of travel is clear, but the underlying position has not improved. European storage is still running behind where it would normally sit at this point in the injection season, a major new LNG project has slipped to the fourth quarter after equipment damage, and the IMF has warned that the buffers which absorbed the initial oil shock are now largely spent. This was a repricing of risk, not of fundamentals, and it is reversible.
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