2 July 2026

Weekly Energy Market Update 

Outlook

The recent spell of extreme heat across Central and Western Europe has subsided, with average temperatures in France and Germany around 8°C lower today than on Thursday last week. This has eased pressure on spot power prices, with day-ahead baseload contracts for delivery today settling at €56.83/MWh in France, €73.31/MWh in Germany and £49.54/MWh in the UK. Looser market fundamentals, supported by stronger wind generation and higher nuclear output, are expected to persist through the middle of next week. Beyond that, forecasts point to another spell of hot weather across parts of Europe, likely to lift cooling demand and support prompt markets, while the lack of progress in indirect US-Iran peace talks should continue to keep a geopolitical risk premium embedded in forward prices.


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General Context
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According to the British Retail Consortium, annual shop price inflation held steady at 1.2% in June as food inflation eased and consumers took advantage of summer promotions despite higher energy prices following the conflict in Iran.

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British manufacturing growth slowed in June, with the PMI falling to 52.5 as new orders weakened, despite a temporary boost to output from firms stockpiling ahead of expected price increases and supply chain disruptions linked to the Middle East conflict.

Oil

 

Brent crude fell $3/bbl week-on-week, driven by the rapid recovery in flows through the Strait of Hormuz, where volumes have rebounded above 10 million b/d, materially reducing the disruption premium priced in during the Iran conflict.

OPEC+ is likely to agree a further 188,000 b/d increase in output targets for August at Sunday’s meeting, adding barrels to a market already under pressure as transit through the Strait continues to normalise.

 

 
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Gas & Power
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Britain's National Energy System Operator (NESO) said this week that it estimates £89 billion of grid investment will be needed through the 2030s, 53% more than its 2024 estimate, reflecting additional offshore transmission projects and higher costs due to inflation. The upgrades are needed to meet electricity demand, which is expected to rise by more than 30% by the mid-2030s, driven by EVs, housing, industry and AI data centres.

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The European Commission said there is no immediate risk to EU gas supplies this winter, despite storage levels remaining below historical averages at 49.1% full, with current inventories on track to meet the bloc's minimum 80% storage target by 1 November. It added that, provided there is no further escalation in the Middle East, continued normalisation of LNG flows through the Strait should help ease pressure on the global LNG market.

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Global LNG supply grew 2% y-o-y in June despite continued Strait of Hormuz disruptions. Middle East LNG exports remained 70% lower y-o-y, although exports from Qatar and the UAE improved, with more than 10 LNG carriers transiting the Strait to supply Asian markets. Non-Gulf supply rose 25%, led by 45% growth from North America (Plaquemines LNG, Golden Pass, Corpus Christi Stage 3 and LNG Canada) and supported by stronger output from Australia, Malaysia, Russia and Nigeria.

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

The compliance clock is ticking and your carbon data needs to be ready

The UK's Sustainability Reporting Standards are moving from guidance to obligation, with phased implementation already underway for large organisations. Add the UK Carbon Border Adjustment Mechanism landing in January 2027 and energy-intensive businesses face a hard deadline to get their carbon and energy data audit-ready.

This isn't a reporting exercise. It's a commercial risk. Organisations without credible, structured energy data face reputational exposure, regulatory penalties and procurement disadvantages as supply chains tighten disclosure expectations.
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