Gas drops 5% as peace talks ease Middle East fears
Gas fell from 111.68p to 106.63p this week (down 4.5%), and power dropped from £94.00 to £89.02 (down 5.3%), as reports of a US-Iran deal pushed prices lower — though Monday saw a sharp spike on renewed Strait of Hormuz tensions before those gains unwound.
Prices fell nearly 5% this week on Middle East peace hopes, but with 30-day data unavailable and fresh supply threats emerging Monday, the picture is too unclear to act or ignore.
What Happened This Week
The week started with a jolt. European gas prices gapped higher on Tuesday morning after the bank holiday weekend, with the NBP front month jumping around 6p/th to roughly 116.85p — the result of a weekend of escalating tensions in the Strait of Hormuz, an extended Qatar LNG force majeure to mid-June, and colder temperatures pushing demand up while wind generation came in below seasonal norms. By Tuesday's close, gas was sitting at 111.68p. Then the mood shifted. Reports emerged on Wednesday that the US and Iran were close to agreeing terms to end the conflict, and prices began to ease. By Thursday, the front month had fallen to around 106.80p — down nearly 10p from Monday's intraday highs — closing the week at 106.63p.
The drivers behind the week tell two competing stories. On the supply side, things look tight: Qatar's LNG outage runs to mid-June, EU storage is at 34% — the lowest on record for this point in the summer injection season — and UK storage actually saw withdrawals this week rather than injections due to the cold snap. Oil is also nudging higher at $113.05/bbl. On the other hand, any genuine progress toward a US-Iran deal would ease the Hormuz threat significantly, freeing up tanker routes and potentially bringing more LNG back to market. The market is essentially pricing in uncertainty — neither fully relaxed nor fully alarmed.
With 30-day front month data unavailable this week, it's harder than usual to put the current 106.63p gas price in context. What we do know is that the 5-week range stretches from 83.28p to 111.96p, and current prices sit around 13% above the 5-week average of 94.20p — so we're not at the low end of recent trade. The forward curve does offer some comfort: Cal27 gas is at 90.18p (down 11.7% over 30 days) and Cal28 is at 70.81p, suggesting the market expects prices to ease meaningfully over the next 1-2 years. But for anyone renewing in the near term, the next few days of Middle East headlines will matter more than the week just gone.
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 |
|---|---|---|---|
| Jun-26 | 107.56p | -4.7% | -14.1% |
| Jul-26 | 106.55p | -4.6% | -14.1% |
| Aug-26 | 106.63p | -4.8% | N/A |
| Q3-26 | 106.98p | -4.7% | -14.2% |
| Q4-26 | 110.29p | -4.4% | -13.5% |
| Q1-27 | 109.82p | -4.7% | -13.2% |
| Win-26 | 110.06p | -4.5% | N/A |
| Sum-27 | 83.55p | -3.3% | -11.6% |
| Win-27 | 85.23p | -2.4% | -9.5% |
| Sum-28 | 64.06p | -1.7% | -5.4% |
| Cal-27 | 90.18p | -3.6% | -11.7% |
| Cal-28 | 70.81p | -1.8% | -6.0% |
| Cal-29 | 63.62p | -1.9% | -6.4% |
| Contract | Price | Week | 30d |
|---|---|---|---|
| Jun-26 | £91.58 | -1.7% | -8.6% |
| Jul-26 | £90.62 | -2.7% | -7.6% |
| Aug-26 | £89.02 | -4.5% | N/A |
| Q3-26 | £90.71 | -2.9% | -8.0% |
| Q4-26 | £94.06 | -3.3% | -5.5% |
| Q1-27 | £93.98 | -3.5% | -8.1% |
| Win-26 | £94.02 | -3.4% | N/A |
| Sum-27 | £73.69 | -2.2% | -5.2% |
| Win-27 | £77.02 | -1.8% | -7.3% |
| Cal-27 | £79.60 | -2.5% | -6.6% |
| Cal-28 | £66.01 | -2.1% | -8.0% |
| Cal-29 | £64.30 | -1.4% | -6.4% |
What To Do About Your Contract
Prices fell nearly 5% this week, which is encouraging — but without 30-day front month data and with active supply threats (Qatar outage, Hormuz tensions), it's hard to call this a safe dip to lock into. Get quotes ready now so you can move quickly if prices dip further or the Middle East situation worsens. Current gas is 13% above the 5-week average, so you're not buying at a bargain.
Cal27 gas has dropped 11.7% over the last 30 days to 90.18p — that's a meaningful move in the right direction. You've got time on your side, but it's worth keeping a close eye on whether Middle East developments reverse that trend. No need to act this week, but get quotes on the table so you know your number.
Cal28 and Cal29 gas are sitting at 70.81p and 63.62p respectively — well below current near-term prices and drifting lower over 30 days. The market expects prices to ease significantly by 2028. Unless your broker flags a specific reason to act early, there's no urgency here — the curve is moving in your favour.
📈 For energy buyers — full forward curve, Sum-27, look-ahead
Sum-27 gas at 83.55p (-3.3% this week, -11.6% over 30 days) and Sum-27 power at £73.69 (-2.2%/wk, -5.2%/30d). Sum-27 sits beyond the immediate near-term volatility window so it tracks differently from the front month.
Forward curve shape: The curve slopes sharply downward from today's 106.63p front month all the way to 63.62p for Cal29 — the market is pricing in a meaningful easing of gas prices over the next two to three years, most likely assuming Middle East tensions settle and LNG supply recovers. That said, near-term contracts (Q4 26, Q1 27) are still priced above 109p, reflecting the ongoing supply tightness this winter.
Look ahead: The biggest thing to watch next week is any development in the US-Iran talks — a signed agreement would likely push prices down sharply, while a breakdown could send them back toward Tuesday's highs. Also keep an eye on Qatar Energy updates around its force majeure, which runs to mid-June; any extension or escalation there would tighten the LNG supply picture further. Weather forecasts for late May will also start to influence storage injection expectations — if temperatures stay below seasonal norms, expect European storage builds to lag and that 34% figure to stay in the headlines.
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Source: ICE Endex / SEFE daily reports · Smart Energy Company — Independent energy broker since 2014
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