Oct25 Energy Market BriefPower and Gas Prices Relax

Gas markets moved into a more bearish environment over the past month, with both short-term and longer-dated contracts trending lower.

The market remained highly sensitive to global political developments, with U.S. trade sanctions and tariffs continuing to create uncertainty around
future energy flows.

While gas and LNG supplies were not directly targeted, the risk of further disruption kept sentiment cautious.

Day-ahead prices eased compared to the previous month, although stronger losses were limited by ongoing concerns over supply security.

Qatar raised the possibility of supply restrictions into Europe, while reduced output from the UK and Norwegian Continental Shelves added to the sense of tighter availability.

Forward contracts tracked the downward direction of the market, though longer-dated positions continued to reflect a degree of risk premium linked to the ongoing Russia-Ukraine conflict and the lack of progress toward a ceasefire.

Electricity prices followed the gas market lower, with day-ahead values dropping to levels not seen for over a year.

Periods of strong wind generation were the dominant factor, helping to suppress reliance on gas-fired generation.

Early in the month, Storm Floris pushed wind output to more than half of the UK’s generation mix, driving down day-ahead prices significantly. Later in the month, Storm Erin brought further surges in renewable generation, reinforcing the downward pressure.

Forward contracts also moved lower, with both front-month and seasonal positions reflecting the broader weakness across the energy complex.