Deal hopes faded and the heat arrived: prices jumped at the open and ground higher
through the week, ending at their strongest since late July.
The diplomacy went backwards. Trump demanded compensation from Iran as a
condition for talks and signalled he would let economic pressure do the work rather than
resume strikes, while Iran answered with sweeping conditions of its own, including the
lifting of the US naval blockade and the withdrawal of American forces from the region. By
Thursday the talks were openly described as deadlocked, with messages passing only
through intermediaries and the US redirecting more commercial vessels away from
Iranian ports. Strikes themselves stayed paused, which kept the move orderly rather than
panicked.
The sharper driver was at home. The heatwave pushed UK day-ahead power to its highest
since June, a bigger move than France or Germany saw, as cooling demand surged
against weak wind and a thinner nuclear fleet, with Hartlepool offline and a Heysham unit
to follow. Norwegian flows dropped sharply at the same time on extended Troll
maintenance and an outage at Nyhamna, and with storage still well below seasonal
norms, every therm burned for cooling is one not going into the ground for winter. Prices
ended the week at their highs, and with the talks stuck and energy bills now forecast to
feed UK inflation, the market has little reason to sell off yet.