Weekly Energy Market Report - Week 45

Gas and power reach their highest levels of the year on 30 October, then fall sharply on hopes of easing tension with Iran, and the week ends lower.

A week of big swings ended with prices lower. Wholesale gas and forward electricity climbed to their highest levels of the year on Friday 30 October, then gave back all of that rise and more in the next two sessions.

This winter’s gas finished about 5% down on the week, and next year’s gas almost 8% down. Forward power fell by less, about 3.5% for this winter. Next-day power went the other way, as low wind kept it far above the week before.

The war with Iran drove most of it. The rise on Friday 30 October and the fall on Monday 2 November were the biggest one-day moves in each direction that we have reported since at least late September.

Gas Market

The Nov-26 contract expired during the week, so Dec-26 is now the main reference for this winter. It closed at 226.17p a therm, down from 238.97p a week earlier. Along the way it reached 257.60p on Friday 30 October, then lost about 31p in two sessions.

The week opened with supply scares. On Wednesday 28 October, outages at Norwegian gas plants, colder forecasts and a power cut at the Freeport LNG plant in the United States all hit together. Renewed tension between the US and Iran pushed prices higher again on Friday 30 October. Then came the reversal, as hopes grew of a deal and reports emerged of progress in talks mediated by Qatar.

Next year fell further than this winter. Summer-27 and Winter-27 each lost almost 8%, although Summer-27 is still about a quarter above its level at the end of September, which matters for any business with a contract renewing next year.

Britain stayed among the cheapest of seven major European gas markets all week, with gas flowing out to Belgium rather than in.

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

Electricity Market

Forward power followed gas, with smaller moves. Dec-26 baseload lost about 3.5% to around £177/MWh. The first quarter of 2027 ended near £182/MWh, after closing above £200/MWh for the first time on Friday 30 October. Next summer fell by nearly 5%.

Next-day power had a very different week. With wind low and gas power stations running hard, it averaged about £207/MWh, against about £127/MWh the week before, and it finished about £30/MWh higher than it started.

Imbalance prices, which suppliers pay when they are short of power, topped about £350/MWh on Sunday 1 November and came close again on Tuesday 3 November. The peak a week earlier was about £280/MWh. Nuclear output stayed weak, with several Heysham units offline or running below capacity.

Oil, Carbon and Global Commodities

Oil fell about 9% over the week, with Brent finishing near $104 a barrel as hopes of an end to the war with Iran grew. Part of that is a change of contract, because the one that expired on Friday 30 October closed about $4 above the one that replaced it. Coal fell by more than 5% and Asian LNG by about 2%. Carbon went the other way, rising in both the UK and EU schemes.

Higher carbon prices add to the cost of running gas-fired power stations, which helps explain why forward power has fallen by less than gas.

Storage and Supply

British storage fell for a second week, from around 65% full to around 60%, and is now the lowest of the major European markets. Rough is still empty. France and Italy are close to 90% and Germany is just above Britain.

Demand has risen quickly. Gas demand this morning is about a third higher than a week ago, as cooler weather and low wind bring more gas into heating and power generation.

Supply has responded. LNG unloading at British terminals is about two and a half times its level a week ago, and the Vesterled and FLAGS route from Norway, which was carrying nothing then, is flowing again. Problems at Troll and Oseberg continue, though Norwegian outages overall are expected to ease by Friday 6 November.

The Week Ahead and What It Means for Your Business

Two things will set the tone: news from Iran and the wind. Wind and solar output is forecast to fall to less than a quarter of normal by Saturday 7 November and recover by Tuesday 10 November, with temperatures slipping below normal by Monday 9 November. That points to high next-day power prices and imbalance spikes for several days. Talks with Iran could move prices sharply in either direction, as they did this week.

For fixed-price buyers, this winter’s wholesale gas is around 7.6p per kWh and power around 18p per kWh, before network costs, levies and supplier margin. That is well below the peak of Friday 30 October, but both are still more than a fifth above their levels at the end of September. If you have a gas contract renewing, compare current gas prices for your business against what you pay now.

Carbon has risen again and is built into every unit of gas-fired power. Our carbon reporting service shows how it lands on your own figures.

To talk through what this week’s moves mean for your own contract dates and consumption profile, speak to one of our energy consultants.

Previous report: Weekly Energy Market Report, Week 44