28 May 2026

Weekly Energy Market Update 

Outlook

Short-term gas prices weakened this week, with the UK day-ahead gas contract down around 10p week-on-week as heatwave conditions suppressed heating demand, while stronger Norwegian exports boosted supply. Spot power markets nevertheless remained firm despite strong solar generation and negative intraday pricing hours across parts of Continental Europe, supported by elevated cooling demand and intermittent wind output, with UK day-ahead baseload averaging £105.58/MWh and Germany €96.42/MWh. Across the curve, prices initially eased on optimism over a US-Iran deal before reversing today after President Trump dismissed reports of an imminent compromise with Tehran. The situation remains fragile, with ongoing strikes between the two sides undermining the ceasefire and increasing the risk of renewed escalation and volatility.


bull-jpg

 
Gas_Power

General Context
Price fluctuation_Up_Icon

According to the British Retail Consortium, shop price inflation rose 1.2% year-on-year in May, driven by supply disruption and higher energy costs linked to the war in Iran.

Union_Jack_Icon

Against this backdrop, UK retailers continued to report weak sales, with consumer demand remaining subdued amid elevated prices and geopolitical uncertainty, although the pace of decline eased from the record contraction seen a month earlier.

Oil

Brent fell around $9/bbl over the past week as markets priced in progress in US-Iran negotiations and easing supply risks. However, optimism over a potential deal is fading, while renewed US strikes against Iran continue to underscore the fragility of the situation and sustain an elevated geopolitical risk premium.

The API reported another sizeable draw in US crude and gasoline inventories last week, reinforcing a tight supply backdrop. However, weaker Chinese demand and lower crude imports continue to temper the oil price rally despite ongoing supply disruptions.

Oil

Gas & Power
Carbon

 

European carbon allowances rose above €79/tonne, supported by renewed confidence ahead of upcoming EU ETS policy discussions rather than any immediate change in fundamentals. UK carbon prices also extended gains, reaching a three-month high amid growing expectations of future linkage with the EU market following reports of a potential mid-July UK-EU summit, narrowing the discount to EU allowances.

Gas_Icon_Market_Update

 

European gas storage levels have risen over the past two weeks, supported by unseasonably warm weather that reduced heating demand and, together with stronger solar generation, lowered gas-fired power demand, enabling higher injections. Although inventories remain low, storage is now 38.8% full, up from 35.7%.

LNG_Icon

 

QatarEnergy has extended force majeure on LNG shipments to Italy’s Adriatic LNG terminal under its contract with Edison, one of its largest European customers, until at least mid-August, citing ongoing disruption in the Strait of Hormuz. Nevertheless, a limited number of LNG tankers have continued to transit the waterway, with a fourth cargo observed crossing on Wednesday after three vessels bound for Asia passed over the weekend, bringing total outbound crossings since late February to eight.

Current Prices
Screenshot 2026-05-28 at 12.47.42

UK Gas (NBP) - Rolling 12-Month Average
May_Rolling

Sustainability Spotlight

2026 is the year UK climate policy becomes enforceable

The UK government's Carbon Budget Growth and Delivery Plan is now in active implementation. Sectoral decarbonisation roadmaps are being developed. The National Wealth Fund is deploying capital into clean energy. And the next phase of sustainable finance disclosure is increasing reporting obligations for large organisations.

For businesses, this means the window to plan is narrowing. Decarbonisation decisions that felt distant are now directly tied to policy timelines, investor expectations, and disclosure requirements. Organisations that have a credible, costed net zero roadmap in place will be better positioned, commercially and reputationally, than those still waiting to act.
Sustainability_Spotlight

 

Talk to our experts

 

All information displayed on this report is to be used for indicative purposes only. The accuracy can not be fully guaranteed and as such True Group holds no liability for actions taken based on the information presented in this report. The contents of the report may not be reproduced, copied or defaced without prior written consent of True Group.