Middle East tensions and low storage push gas and power higher
Gas rose 4.0% to 117.93p/therm and power climbed 2.5% to £102.91/MWh this week, but the real story is the 30-day trend: gas up 6.0%, power up 10.8%. Geopolitical risk in the Middle East, a potential Norwegian strike, and European storage at a five-year low for this time of year are all supporting prices.
Both gas and power are up 6–11% over 30 days and continued climbing this week; near-term contracts (Jul–Sep) show no relief, and geopolitical risk plus low storage are keeping upward pressure firm.
What Happened This Week
Gas and power both moved higher this week, with gas up 4.0% and power up 2.5%, but the story is not just the weekly move—it's the 30-day trend underneath. Gas is up 6.0% over the month and power up 10.8%, and neither market has found a floor. The week opened with Middle East escalation pushing prices higher on Monday, then settled into a sideways-to-firm pattern as traders balanced geopolitical risk against mixed signals about ceasefire talks. By Friday, the rejection of a ceasefire proposal between Israel and Hezbollah re-anchored the market to the upside, keeping both commodities elevated.
The drivers are layered and mutually reinforcing. Geopolitical tension in the Middle East is the headline, but it's not the only thing keeping prices up. European gas storage is at a five-year low for early June, injection rates are lagging, and a potential Norwegian strike on 5 June threatens a key supply route. On the power side, UK nuclear availability has tightened—five reactors offline or running at reduced capacity—forcing more reliance on gas-fired generation. Carbon allowances have also climbed to a four-month high at €80/tonne, raising the cost of thermal generation. Weather has been a minor factor: cooler conditions mid-week lifted heating demand slightly, but the underlying supply-and-demand picture is what's driving the uptrend.
For anyone renewing in the next six months, this is a critical moment. The 30-day trend is decisively upward for both fuels, and the forward curve shows no sharp relief until well into 2027. Q4-26 gas is priced at 122.16p (up 3.6% this week) and Q1-27 at 118.21p; power Q4-26 is at £104.80 and Q1-27 at £101.21. If you're renewing 12–18 months out, you're looking at Cal-27 gas at 93.69p (up only 0.4% in 30 days, well below near-term) and power at £84.25 (up 3.0%), suggesting the market expects some easing by then. Longer-dated contracts (Cal-28, Cal-29) are flat to slightly down, hinting at a gradual normalisation over the next two years.
What Moved the Market
Where Prices Are Right Now
Wholesale rates at week-end close. Your business rate will be higher.
| Contract | Price | Week | 30d |
|---|---|---|---|
| Jul-26 | 117.93p | +4.0% | +6.0% |
| Aug-26 | 118.16p | +3.8% | +5.8% |
| Sep-26 | 119.41p | +4.0% | N/A |
| Q3-26 | 118.49p | +3.9% | N/A |
| Q4-26 | 122.16p | +3.6% | N/A |
| Q1-27 | 118.21p | +2.7% | N/A |
| Win-26 | 120.21p | +3.2% | +4.2% |
| Sum-27 | 85.49p | +0.5% | -0.5% |
| Win-27 | 86.41p | +0.1% | -1.0% |
| Sum-28 | 64.95p | -0.2% | -0.1% |
| Cal-27 | 93.69p | +1.1% | +0.4% |
| Cal-28 | 71.97p | -0.0% | -0.0% |
| Cal-29 | 64.53p | +0.2% | -0.4% |
| Contract | Price | Week | 30d |
|---|---|---|---|
| Jul-26 | £102.91 | +2.5% | +10.8% |
| Aug-26 | £100.40 | +2.7% | +6.8% |
| Sep-26 | £102.16 | +1.9% | N/A |
| Q3-26 | £101.82 | +2.4% | N/A |
| Q4-26 | £104.80 | +1.6% | N/A |
| Q1-27 | £101.21 | +0.3% | N/A |
| Win-26 | £103.03 | +0.9% | +5.4% |
| Sum-27 | £78.04 | +0.4% | +3.6% |
| Win-27 | £79.74 | +0.3% | +1.3% |
| Cal-27 | £84.25 | +0.3% | +3.0% |
| Cal-28 | £67.79 | -0.1% | +0.4% |
| Cal-29 | £65.37 | +0.4% | +0.5% |
What To Do About Your Contract
Gas is up 6.0% in 30 days and power up 10.8%; both are still climbing. Near-term contracts (Jul–Sep) show no relief, and geopolitical risk plus the Norwegian strike threat on 5 June mean prices could spike further. Get quotes now; waiting risks paying more.
Cal-27 gas is at 93.69p (up only 0.4% in 30 days) and power at £84.25 (up 3.0%), well below the near-term spike. The market expects some easing by 2027. You have time; watch for clarity on the Norwegian strike outcome and Middle East resolution before moving, but don't panic—the curve suggests relief is coming.
Cal-28 and Cal-29 are essentially flat (gas -0.0% to +0.2% in 30 days, power -0.1% to +0.5%), suggesting the market sees a return to normal by 2028. These moves are noise; wait until closer to renewal or until the geopolitical picture clarifies materially.
📈 For energy buyers — forward curve shape + look-ahead
Forward curve shape: The curve is steep: gas falls from 122.16p in Q4-26 to 85.49p in Summer-27 and 64.95p in Summer-28, signalling the market expects a sharp easing once winter demand passes and geopolitical risk fades. Power follows a similar shape, from £104.80 in Q4-26 to £78.04 in Sum-27 and £65.37 in Cal-29, implying a gradual normalisation over the next two years.
Look ahead: Watch the Norwegian strike outcome on 5 June—any confirmed volume loss would likely push prices higher. Monitor Middle East ceasefire talks closely; a genuine agreement would remove a key risk premium. Also track European storage injection rates over the next two weeks; if they remain below seasonal norms, the market will price in a tighter winter and support prices further.
Where The Market Is Today —
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Source: ICE Endex / SEFE daily reports · Smart Energy Company — Independent energy broker since 2014
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