Brief Recap of April

Wind generation nearly doubled gas-fired generation during April. Despite continued volatility driven by tensions in the Middle East, underlying market fundamentals remained relatively strong and helped prevent further price increases.

Norwegian maintenance began with several smaller outages ahead of more significant maintenance activity in May. Temperatures were slow to rise despite longer daylight hours, while Solar generation gradually increased seasonally.

In the Middle East, mixed signals continued to emerge regarding a potential peace agreement between the US and Iran. Pakistan appeared to support US claims that progress was being made, although negotiations remained uncertain.

May

Calmer and warmer weather conditions during May saw a narrowing between Gas and Power generation levels. Power demand also increased towards the end of the month as warmer temperatures drove higher cooling demand, with the UK experiencing its hottest May days on record.

Both natural gas and LNG storage levels fell below those seen at the same point last year. This remains a concern for market commentators ahead of Winter 2026, particularly given existing worries around the UK’s gas storage position. If colder weather materialises later in the year, lower storage levels could place additional pressure on both supply and prices. Current storage levels remain closely linked to elevated prices driven by ongoing tensions in the Middle East.

The market was also impacted by Norway’s largest planned maintenance window of the summer, with approximately 187mcm/day of supply offline during the middle of the month. In response to heightened geopolitical tensions, some Norwegian maintenance volumes were reduced in an attempt to help limit further price increases.

Conflict in the Middle East continued despite fragile ceasefire agreements involving Israel, Lebanon, the US and Iran. Sporadic fighting on both fronts persisted throughout the month, while negotiations between the US and Iran continued with limited progress. Both sides saw several proposals rejected, with the key sticking points reportedly remaining Iran’s Uranium stockpiles and access through the Strait of Hormuz.

The US maintained pressure through restrictions on Iranian ports, while vessel movements through the Strait of Hormuz remained significantly reduced. President Trump also sought diplomatic support from Chinese President Xi Jinping during a state visit to China. While China supported calls for the Strait of Hormuz to reopen and for Iran not to develop nuclear weapons, no direct intervention was offered.

Looking Ahead to June

Market focus remains firmly on developments in the Middle East. While the final week of May brought some indications that progress towards peace may be possible, negotiations between the US and Iran remain uncertain.

Norwegian maintenance activity continues into June, although the most significant outages have now passed until the next major maintenance window begins in September.

Markets are therefore likely to remain sensitive to geopolitical developments and supply-side disruptions in the weeks ahead.