11 June 2026

Weekly Energy Market Update 

Outlook

The arrival of windy and sunny conditions, combined with temperatures only slightly above seasonal norms across north-western Europe, should allow short-term prices to ease significantly, particularly in power markets. France is expected to average around 2°C above normal over the next five days, while Germany, Belgium and the Netherlands should remain 2-3°C below seasonal levels. In Germany, wind generation is forecast to rise sharply to 20-29 GW, while solar output is expected to peak at 13-14 GW in France, 39-40 GW in Germany and around 24 GW in Spain. Beyond this bearish near-term outlook, weather models point to a likely return of heatwave conditions, which could provide support to spot prices. For longer-dated contracts, the focus remains on the volatile situation in the Middle East and the continued expansion of global LNG liquefaction capacity.


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General Context
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UK retail sales rose 3.7% YoY in May, supported by warm weather and two bank holidays. However, retailers remain cautious amid persistent cost pressures and geopolitical risks, suggesting the rebound may prove short-lived.

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The ECB raised interest rates by 0.25% to 2.25%, its first increase since 2023, as policymakers sought to contain inflationary pressures from higher energy costs despite weak economic growth.

Oil

Despite ongoing supply tightness and escalating geopolitical tensions in the Middle East, Brent has declined by $3/b week-on-week. Markets appear to be pricing the latest developments around the Strait of Hormuz as a contained event, with limited risk to physical supply flows, leading to a partial erosion of the geopolitical risk premium.

OPEC's May oil production fell to its lowest level in more than two decades, as a US blockade sharply reduced Iranian exports and disruptions in the Strait of Hormuz affected Gulf shipments. Total output declined by 1.06 million bpd to 16.13 million bpd, with Iran accounting for the largest share of the losses.

 

 
Oil

Gas & Power
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Three additional LNG cargoes have emerged after transiting the Strait of Hormuz with their tracking signals switched off. QatarEnergy's Lebrethah and Rasheeda, loaded at Ras Laffan, have resurfaced en route to Pakistan and Southeast Asia respectively, while ADNOC-managed Marigold is heading to India. In total, 12 LNG cargoes have exited the Strait of Hormuz since the conflict began at the end of February.

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Germany's Stade floating LNG terminal (4.7bcm/year) is set to begin operations in September after repeated delays from its original 2024 launch date. Meanwhile, the 13bcm/year onshore LNG terminal at Stade has been delayed until 2029, from a previous target of end-2027. Germany currently has four floating LNG terminals in operation, with the total expected to rise to six once all planned projects come online.

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Germany's BNA regulator has scheduled two auctions for a total of 9 GW of new gas-fired generation capacity, with 4.5 GW to be tendered on 8th September and a further 4.5 GW on 22nd December. A separate 2 GW auction open to all generation technologies is planned for 18th May. Additional capacity auctions are expected in 2027 and 2029, although volumes have not yet been specified.

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

EU sustainability rules are being rewritten

The EU's Omnibus I package is moving fast, amending both CSRD and CSDDD with a new four-and-a-half-year Member State implementation window. Combined with delays to the EU Deforestation Regulation and growing ESG litigation across Europe, large organisations face a reporting landscape that's changing shape in real time.

For finance, legal, and sustainability teams, this is a reason to get ahead. Knowing which obligations still apply, which timelines have moved and where legal exposure is growing is now a commercial necessity, not a compliance nicety.
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