16 July 2026

Weekly Energy Market Update 

Outlook

Another record-breaking heatwave across Europe, increasing cooling demand while weak wind and hydro generation and lower nuclear output reduce supply, combined with the near-interruption of traffic through the Strait of Hormuz, has driven another sharp increase in European gas and power prices. Winter 26 gas, for example, has gained 10% week-on-week to 134.25 p/th, while UK day-ahead baseload power for delivery today cleared at £134.28/MWh. Although short-term fundamentals are expected to improve as temperatures ease back towards seasonal norms across much of Europe over the coming days, the situation in the Middle East remains a key upside risk, particularly if the region's energy infrastructure is further damaged.


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General Context
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UK industrial production came in below expectations in May, underlining the continued fragility of the sector. High energy costs and ongoing geopolitical uncertainty continue to weigh on manufacturing activity, reinforcing expectations of weak economic growth.

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China's economy grew at its slowest pace in more than three years in the second quarter, missing expectations as weak household consumption outweighed resilient manufacturing and exports. GDP growth slowed to 4.3% from 5.0% in the first quarter, falling below the government's 4.5% to 5.0% full-year target.

Oil

 

Oil prices have risen by $6/bbl week-on-week to near a five-week high, as renewed hostilities between the US and Iran have reduced shipping volumes through the Strait of Hormuz and increased the risk of further damage to regional energy infrastructure.

Goldman Sachs estimates that Brent crude could rise above $110/bbl in the fourth quarter if the recovery in Gulf oil exports remains constrained. Conversely, prices could fall back into the $60s by year-end if geopolitical tensions ease and exports recover faster than currently expected.

 
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Gas & Power
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France’s heat-related nuclear outages reached a record 9.2 GW, or 14.5% of installed nuclear capacity, earlier this week as temperatures peaked at 42.3°C during the third heatwave of the summer, providing further support to already strong European short-term gas and power markets.

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Low water levels on the Rhine have forced coal barges to cut cargo loads by around two-thirds. Although ample coal stocks at bulk terminals and 3 to 4 weeks of inventory at German power plants should limit any near-term impact, a prolonged disruption could increase power prices if coal has to be transported inland by truck.

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The ongoing disruption to LNG exports from Qatar, combined with a third heatwave across Europe, has slowed the pace of gas storage injections. Inventories have increased by 3.5 percentage points over the past two weeks to 52.8%, leaving storage levels 10.8 percentage points below the same point last year.

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

The UK is generating more renewable power than it can use — and that changes how you buy energy.

Wind and solar output is regularly exceeding grid demand, forcing curtailments across the network. For large energy buyers, that's not just an infrastructure story — it's a procurement opportunity. Oversupply dynamics are reshaping Power Purchase Agreement pricing and altering the investment case for on-site renewables and battery storage.

Organisations that understand these market shifts can time procurement decisions more intelligently, structure better PPAs, and assess where storage genuinely adds commercial value — rather than reacting after the market has moved.

This is exactly the kind of strategic intelligence True Group brings to energy procurement. Speak to our team to understand what the UK's renewable glut means for your buying strategy.
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