Energy markets remained volatile into early August, as brief hopes of a ceasefire were followed by renewed conflict and continued uncertainty around LNG supply routes.
Near-term power prices remained elevated as concerns over French nuclear availability tightened electricity supply.
Longer-term power contracts eased from recent highs after the temporary ceasefire reduced some of the risk previously built into the market.
Day-ahead electricity prices remained significantly higher than earlier in the month as renewable generation weakened.
Gas prices fell sharply following the ceasefire announcement before edging higher again as conflict resumed and peace negotiations remained unresolved.
Recent attacks on LNG vessels have increased concerns over the safety and reliability of supply routes through the Middle East.
Demand for gas within the UK system remained firm, supported by strong exports to continental Europe.
Markets will continue to watch developments in the Middle East, LNG availability and European storage levels. While easing geopolitical tensions have reduced some market pressure, weather conditions and supply fundamentals are expected to remain important drivers over the coming weeks.
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