10 September 2026

Weekly Energy Market Update 

Outlook

Nuclear generation across the continent remains constrained, which, combined with low hydro and wind output and surging gas prices, has pushed short-term power prices sharply higher. Day-ahead baseload for delivery tomorrow cleared at £173.05/MWh in the UK and €195.23/MWh in Germany. However, the main bullish driver is once again the war in the Middle East, which has escalated markedly over the past few days, with several cargoes hit in the Gulf and increased fighting between Houthi and Saudi forces. Against this backdrop, a reopening of the Strait of Hormuz and the return of Qatari LNG volumes to the market appear increasingly distant, leaving European markets particularly vulnerable given historically low gas storage levels and continued competition from Asian buyers for the limited spare LNG cargoes available globally.


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General Context
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UK hiring conditions improved in August, with permanent placements rising for the first time since September 2022 and temporary demand strengthening, although falling vacancies and high candidate availability continued to point to subdued labour demand.

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German exports unexpectedly fell by 0.8% in July, as weaker shipments to the EU and China highlighted continued fragility in Europe’s largest economy. Exports to the US jumped 19.1%, likely reflecting some front-loading of shipments around changes to US tariffs.

Oil

Brent crude is trading well above $100/bbl as concerns over deeper supply disruptions have intensified following the largest US-Iran attacks on shipping since the conflict began. Stronger buying from China, the world’s largest crude importer, is also supporting physical demand.

Goldman Sachs sees oil potentially reaching $120/bbl if Middle East shipping disruptions worsen, with natural gas and diesel prices also likely to rise. However, a normalisation of regional exports could push oil back towards $80/bbl.

 
Oil

Gas & Power
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Sweden’s Vattenfall announced today that it has taken a final investment decision to build a large battery storage facility in Germany, which will be located at the site of the former Brunsbüttel nuclear power plant. The 254 MW battery will have a storage capacity of around 1,000 MWh and is expected to be connected to the grid by the end of 2028.

Carbon

 

 

The European Parliament’s environment committee has backed extending the automatic cancellation of surplus EU allowances above 400 million in the Market Stability Reserve until February 2027, before raising the threshold to 650 million from March 2027. This contrasts with the European Commission’s proposal to end automatic cancellations as soon as possible, which would leave more allowances in reserve to respond to future market tightness.

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Over the summer, low LNG deliveries, persistent drought conditions across the continent and repeated heatwaves have slowed the pace of injections into European gas storage facilities. Inventories currently stand at 67.3%, having increased by just 3.5 percentage points over the past two weeks, leaving storage 2.4 points below the record-low level seen in 2021 and 12.4 points below 2025.

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

Significant increase in Solar PV installation in the UK

UK solar adoption is accelerating, with installations rising 407% from 53,044 in 2019 to 269,176 in 2025. Momentum remains strong, with 191,997 installations recorded between January and August this year.

Rural, coastal and suburban areas are leading deployment, helped by greater roof space and fewer installation barriers. Demand is also being driven by households seeking greater control over energy costs and protection from future price volatility.

The trend reflects a wider shift towards decentralised renewable generation. For businesses, on-site solar can similarly reduce grid dependence, provide greater cost certainty and cut carbon emissions, where the commercial case stacks up.
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