Market Drivers June 2026
Bearish Drivers
· European gas storage still needs significant summer refilling.
· Strong Asian LNG demand could divert cargoes away from Europe.
· Risk of further Norwegian production or infrastructure outages.
· Ongoing geopolitical risks affecting LNG shipping routes and supply (despite peace deal partially announced).
· Low wind periods increase UK gas-fired power generation demand.
· Early cold weather risks later in the year remain a market concern.
Bullish Drivers
· Norwegian gas flows have improved recently.
· Large volumes of new LNG export capacity are entering the global market.
· Seasonal reduction in heating demand through summer.
· Easing geopolitical tensions have reduced risk premiums.
· Healthy renewable generation can reduce gas burn.
· Industrial gas demand remains relatively subdued.
June has been a volatile month for UK gas and power markets. Prices strengthened in the first half of the month as traders reacted to concerns over Norwegian gas supply, lower renewable generation and escalating tensions in the Middle East, which increased fears around LNG supply security and added a significant risk premium to European energy markets. This pushed both UK NBP gas and Baseload power prices higher, with gas continuing to set the marginal price for much of the UK power market.
The rally reversed sharply in mid-June as geopolitical tensions eased and Norwegian gas flows improved, removing much of the risk premium that had built into prices. As a result, gas, power and oil markets all moved lower. Despite this correction, underlying support remains from Europe’s ongoing gas storage refill requirements and the UK’s reliance on gas-fired generation during periods of low renewable output.
Overall, the market sentiment currently is softer than at the start of June, with prompt contracts under pressure from improving supply fundamentals. However, Winter 2026/27 contracts remain relatively well supported by storage concerns, potential LNG competition from Asia and ongoing energy security risks, leaving the longer-term outlook more bullish than the near-term market.