High temperatures across Europe, have led to some upward pressure on energy prices. The relative strength of demand in continental Europe has lead to a widening premium of TTF over UK gas prices which is directing flows of Norwegian gas towards continental markets and limiting supplies to the UK, but European markets, generally, are now at a significant discount to LNG prices in Asia whilst overall global LNG exports are down and this is contributing to lower LNG send out rates into the European market and a reduced rate of injections into storage.
Weather forecasts suggest that temperatures will remain high and windspeeds low, for the coming days, until a cold front comes in from the Atlantic bringing with it cooler and more unsettled weather, but becoming warmer again later this month and into August. It therefore seems possible that markets may soften on stronger wind generation and lower air conditioning demand next week, before coming under further upward pressure later this month.
Markets have also been watching trade developments closely and had been down at the start of this week on Trump’s announcement that letters were going to be issued to countries where insufficient progress has been made on tariff negotiations, setting out tariff rates. However, the deadline has in effect been pushed back again for many countries and there has been a relief rally in markets pushing the S&P 500 back up close to all time highs and Brent crude over 70 \$/b.
| Commoditiy | Front contract (£p/therm) | Winter 25/26 (£p/therm) | Summer 26 (£p/therm) | Winter 26/27 (£p/therm) |
|---|---|---|---|---|
| Price | 82.03 | 93.49 | 83.73 | 90.98 |
| Weekly Change | 1.92 | 0.95 | 1.01 | 1.09 |
| Commoditiy | Front contract (£/MWh) | Winter 25/26 (£/MWh) | Summer 26 (£/MWh) | Winter 26/27 (£/MWh) |
|---|---|---|---|---|
| Price | 74.00 | 84.44 | 72.07 | 81.28 |
| Weekly Change | 0.60 | 0.51 | 0.70 | 0.36 |
| Commoditiy | US Gas ($/mmbtu) | Brent ($/b) | EUA (€/MT) | UKA (£/MT) |
|---|---|---|---|---|
| Price | 3.20 | 70.19 | 70.02 | 46.56 |
| Weekly Change | -0.29 | 1.08 | -1.51 | -1.59 |
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