Weekly Energy Market Report - Week 38

Gas broke through 200p a therm and fell back twice, day-ahead power travelled £134 to finish £17 higher, and the winter contracts quietly did the real moving.

Gas: through 200p, then a see-saw

NBP day-ahead settled 197.65p, 205.25p, 198.80p, 207.35p and 197.50p across the week, from 189.25p. The 200p line was crossed twice and lost twice, and the week ended 4.36% higher.

The winter strip moved as a block and kept more of its gains. Oct-26 finished at 198.41p, up 9.61p, Q4-26 at 201.76p, up 10.68p, and Winter-26 at 201.53p, up 12.13p or 6.40%. Q1-27 rose further than any of them, 13.61p to 201.29p, and Dec-26 is the dearest contract on the board at 204.32p.

Further out the rise thinned. Summer-27 added 8.07p to 134.75p and Winter-27 5.73p to 127.44p, while Summer-28 gained 2.09p to 80.81p. The gap between this winter and next widened from 67.69p to 74.09p, having reached 78.44p on Monday.

None of this was a weather story. Britain’s temperature chart ran above the seasonal mean all week, and the gas system opened long every morning from 10 to 16 September, by between 9 and 32 mcm/day. Prices were set by Norway and the Middle East.

Norwegian supply swung inside the week. Exit nominations ran 293.4 mcm/day on 10 September, 288 on 14 September and 300 on 15 September, then dropped to 280.9 this morning as a new Nyhamna outage cut 38.8 mcm/day and unplanned work at Troll another 25. Maintenance at Karsto runs to 25 September. The Dutch hub reached its highest level in almost four years during the week.

Britain stayed the cheapest of the seven European hubs on every session. The discount to TTF read 3.61p, 3.20p, 2.86p, 3.49p and 6.00p, from 2.84p the week before, and Britain exported more gas to the Netherlands as the week went on: around 11 mcm/day through BBL early in the week and 16 mcm/day by this morning.

Our own morning indications had a poor week and we said so each day. Gas marks came in low by about 1p and then 5p on the first two sessions, then high on the last three, by up to 5.77p on Tuesday. On a market moving 6p to 10p a session, a morning mark is a direction at best.

The card below summarises where NBP contracts stood after the five settled sessions of this period.

Power: a third off in a day, and most of it back

Day-ahead baseload settled £163.50, £176.00, £117.34, £166.56 and £171.17. Friday 11 September took £58.66 off in one session; Monday put £49.22 of it back.

Day-ahead peak did the same thing harder: £155.77, £174.94, £69.68, £159.21 and £175.84, a Friday fall of 60% and £233.52 of travel for a net £23.00.

The peak-below-baseload run that defined the last fortnight is over. Peak settled under baseload on every session from 1 to 14 September, ten in a row, with the gap reading £7.73, £1.06, £47.66 and £7.35 this week. On 15 September peak settled £4.67 above baseload for the first time since 28 August.

The forward curve rose with far less drama. Oct-26 baseload added £5.28 to £152.52, Q4-26 £6.30 to £159.53, Winter-26 £8.14 to £161.05 and Q1-27 £10.01 to £162.60. Summer-27 rose £5.20 to £107.06 and now sits above Winter-27 at £106.24, an unusual shape on thin trading that has held for three sessions.

Nuclear availability tightened. Outages stood at 2,345 MW until Hartlepool 2 went fully offline for planned work on 14 September, taking the total to 2,725 MW across five units.

The imbalance market kept its extremes. The daily maximum system buy price ranged from £217.00 to £276.80, the latter on Sunday 13 September, while the daily minimum system sell price went from £144.49 down to minus £67.50 on Saturday 12 September. On 10 September this report said negative midday pricing had gone out of this market. It was wrong within a day.

Oil, carbon and LNG

Brent was the week’s biggest mover, up $10.83 or 11.06% to $108.75/barrel. It closed above $100 for the first time since July on 9 September, jumped 6.34% on 10 September, and set its highest settlement of the month on 15 September. The drivers were attacks on shipping in the Gulf, Houthi activity around the Red Sea, and postponed talks between Iran and Gulf states.

Commodity	Settlement 15 Sep	Change on the week
Brent Crude M+1	$108.75/barrel	+11.06%
Coal API2 Cal-27	$135.73/tonne	+1.06%
EUA Carbon Dec-26	€85.61/tonne	+0.22%
UK ETS Dec-26	£60.65/tonne	-0.44%
JKM LNG M+1	$27.77/MMBtu	+3.54%

JKM front month rose $0.95 or 3.54% to $27.77/MMBtu, after touching $28.89 on 14 September. Asia kept a premium over NBP spot all week, between $0.91 and $1.19, so Britain was competing for the same cargoes the whole time.

Carbon finished almost where it started after a busy week. EUA Dec-26 added €0.19 to €85.61/tonne, having reached €87.99 on Monday, while UK ETS Dec-26 slipped £0.27 to £60.65. The sterling contract’s discount to the EUA narrowed from €14.37 to €12.75 by Friday and then widened back to €14.74. For anyone reporting carbon costs under both schemes, that gap moved more than either price.

Sterling firmed slightly to 1.1685 against the euro and slipped to 1.3474 against the dollar from 1.3537, adding a little to the cost of dollar-priced oil and LNG.

Storage: Britain finally moves off 49%

Britain’s storage reading moved to 50%, its first reading above 49% since 27 August. Across the week France went from 73% to 75%, Germany from 54% to 55%, Italy from 83% to 84% and the two Benelux figures from 49% and 57% to 51% and 59%. Spain held 73%.

Inside Britain the salt caverns and the LNG tanks went opposite ways. Hornsea rose from 58% to 61% and Stublach from 75% to 76%, while Aldbrough fell from 51% to 49%. South Hook dropped from 63% to 55% and Isle of Grain from 31% to 28%. Rough and Humbly Grove, the country’s largest and one of its smaller seasonal sites, are still empty.

The LNG schedule barely featured Britain. A 100 mcm cargo booked into Milford Haven for 15 September dropped off the list on 10 September, and the only British arrival reported all week was a single cargo into South Hook. This morning’s list has ten cargoes, about 925 mcm, booked into northwest Europe between 16 and 19 September, and none for a UK terminal.

That leaves Britain half full, exporting to the continent and short of incoming cargoes going into the second half of September. Anyone setting a gas price for this winter is buying into that position.

The week ahead

Wind should help the prompt early and fade late. The forecast has combined wind and solar at the seasonal norm today, around 15,200 MWh tomorrow and near 16,000 on 19 September, then under the norm from about 21 September and down to around 6,800 by the 23rd. That forecast has changed shape three days running, so treat the back half as provisional.

UK temperatures are forecast above the seasonal mean every day to 23 September. On supply, Karsto maintenance runs to 25 September, Torness 1 and Heysham 1 reactor 1 are due back around the same date, and Hartlepool 2 around 30 September.

For a buyer, Winter-26 at 201.53 p/therm and £161.05/MWh, roughly 6.9p/kWh and 16.1p/kWh at wholesale, is 6.4% and 5.3% dearer than a week ago, and Winter-27 is 74.09p and £54.81 cheaper. In a week when the winter price moved by around 3% on most sessions, splitting the purchase across dates beats trying to pick the day. Next week’s report picks up from the 15 September close.

For a view tailored to your consumption profile and renewal window, speak to one of our energy consultants today.

Previous report: Weekly Energy Market Report, Week 37

For the following week’s energy market analysis, read our Weekly Energy Market Report, Week 39.

For more recent analysis, read our Weekly Energy Market Report, Week 40.