23 July 2026

Weekly Energy Market Update 

Outlook

European gas prices have increased sharply again this week, with the escalating conflict in the Middle East, unplanned North Sea outages, lower LNG deliveries, reduced nuclear output and forecasts of another heatwave driving the Winter 26 gas contract 14% higher, currently trading at 152.00 p/th. Power prices have followed suit and are likely to remain supported by strong short-term fundamentals, as a fourth heatwave and below-average wind generation next week are expected to keep system balances tight, particularly during the evening peak. Looking ahead, the conflict between the US and Iran is reducing expectations of a near-term normalisation of Qatari LNG exports. Combined with Europe's low gas storage levels, this is expected to keep upward pressure on gas prices.


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General Context
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UK labour market data for the three months to May pointed to a gradual cooling, with private-sector wage growth slowing to 2.9% (its weakest pace in five years), while unemployment remained steady at 4.9%.

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Meanwhile, inflation in Britain fell more than expected to a 15-month low of 2.6% in June, helped by lower petrol, food and clothing prices. However, the improvement may prove short-lived as the renewed conflict in the Gulf pushes energy prices higher.

Oil

 

Oil prices climbed to a six-week high as the escalating conflict in the Middle East spread to the Red Sea, where attacks targeted two Saudi-linked tankers, heightening concerns over regional oil supplies. The widening conflict has strengthened expectations that the global oil market will remain in supply deficit through 2026.

Goldman Sachs maintained its fourth-quarter 2026 Brent forecast at $80/bbl, based on the assumption that tensions between the US and Iran ease by year-end. The bank nevertheless raised its upside forecast from $110/bbl to above $120/bbl if disruption in the Strait of Hormuz persists into the fourth quarter.

 
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Gas & Power
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Egypt is reportedly seeking to secure 15 to 18 LNG cargoes per month under multi-year contracts, marking its largest LNG procurement programme to date. The move reinforces its transition from a seasonal buyer to a structural importer and is expected to further tighten the global LNG market.

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LNG deliveries to Europe are set to fall again this week to 1.6bcm, their lowest level since September 2021, as the ongoing conflict in the Middle East intensifies competition for cargoes between Europe and Asia. This is likely to further slow the pace of gas storage injections, with inventories increasing by just 1.6 percentage points week-on-week to 54.4%.

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The European Commission has recommended delaying the enforcement of penalties on gas and LNG importers that fail to comply with its new methane reporting requirements until 2030, citing ongoing market volatility and the need to safeguard security of supply.

Current Prices
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UK Gas (NBP) - Rolling 12-Month Average
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Sustainability Spotlight

Climate policy is broadening beyond emissions reduction

Significant climate policy developments are emerging across Europe, with governments increasingly focusing on carbon removal and climate resilience. In the UK, proposals to support greenhouse gas removals aim to encourage investment in carbon capture technologies. Meanwhile, in France, plans for additional paid leave during extreme weather highlight how climate adaptation could begin to influence workforce planning and business continuity.

As climate policy continues to evolve, organisations that stay ahead of these changes will be better placed to manage risk, identify opportunities and plan with confidence.
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