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⚡ Daily Energy Market Update
18 August 2026

???? Energy prices edge higher
UK gas and electricity prices have moved higher again today, particularly for contracts covering the coming winter.

Day-ahead gas is around 156p/therm, while day-ahead electricity is approximately £142/MWh. Winter 2026 gas is around 24% higher than three months ago, highlighting how quickly the market has changed.

???? What's pushing prices up?
The biggest concern remains the US-Iran conflict and disruption around the Strait of Hormuz.

Peace negotiations appear to have stalled and further attacks on vessels have been reported. This is keeping uncertainty around Middle Eastern energy supplies firmly priced into the market.

Closer to home, low wind generation is increasing the amount of gas needed to generate electricity. Norwegian gas flows have also fallen slightly, adding further pressure to the short-term market.

❄️ Winter remains the key concern
European gas storage is now forecast to reach only around 67% full by 1 November.

More importantly, current forecasts suggest storage could fall to around 13% by the end of winter. In a particularly cold winter, stocks could potentially be depleted by early March.

This leaves the market vulnerable to further price increases if we experience cold weather or additional supply disruption.

???? What does this mean for businesses?
The short-term market remains expensive and volatile, with Winter 2026 particularly exposed.

However, prices further into the future remain considerably lower. For example, Summer 2028 gas is currently around 70p/therm, compared with approximately 155p/therm for Winter 2026.

For businesses with contracts ending in 2027, 2028 or beyond, it could therefore be worthwhile reviewing future purchasing options now rather than simply waiting until renewal.

Our view: The immediate market remains risky, but the longer-term market continues to offer much better value. Businesses should consider their future energy strategy early and take advantage of attractive forward prices where appropriate.