Energy Market Report - 05 October 2026
Geopolitics returned to the front of the energy complex at the weekend as Houthi forces closed the Bab el-Mandeb shipping corridor and Saudi-backed forces launched a campaign to retake it, adding a fresh risk premium to a European gas market already short of storage. Gas and power curves closed higher on Friday and the near-dated contracts remain well supported, while oil has stayed stubbornly range-bound and carbon has given ground.
Natural Gas
Gas is being pulled upward by winter risk rather than by anything happening in the system today. NBP November settled at 188.10 p/therm on Friday and Q1-27 at 186.98 p/therm, both up close to 3 per cent on the week, with day-ahead at 181.50 p/therm; TTF day-ahead settled at €74.99/MWh and has pushed above €76/MWh this morning to two-week highs. The physical backdrop is actually easier than the price suggests. Norwegian maintenance is complete and Gassco nominations have reached close to 330 mcm/day, UK pipeline imports from Norway are nominated at 86 mcm/day, UKCS output is steady above 90 mcm/day, and the UK system opened 29 mcm/day long. What is keeping the premium in place is storage and politics. European inventories stand at 72.40 per cent of capacity, around 15 percentage points below the five-year norm, with the UK at just 31.89 per cent and Germany and the Netherlands both under 60 per cent. QatarEnergy has extended force majeure on LNG deliveries to Italy's Edison into early December, covering roughly 35 cargoes, and commercial LNG transit through the Strait of Hormuz remains largely halted, concentrating supply onto Atlantic cargoes just as a cold front is forecast to arrive on Wednesday.
Electricity
Power followed gas higher on the curve while the prompt softened. UK day-ahead baseload settled at £151.95/MWh on Friday, down £2.45, with peak below baseload at £148.00/MWh as strong midday solar flattened the daily shape, and Monday delivery cleared around £148.75/MWh. Further out, November baseload closed at £152.94/MWh, Q1-27 at £154.50/MWh and January-27 at £162.49/MWh, the last of these up almost 7 per cent on the week and roughly 17 per cent above its early-September level. Generation availability is the reason. Refuelling and unplanned outages at Heysham and Hartlepool have around 783 MW of UK nuclear offline, while in France a 24-hour EDF union strike beginning Monday evening threatens nuclear output at a point when hydro reserves are 21 percentage points below normal. Wind is the near-term swing factor, with speeds of 4 to 6 m/s across north-west Europe today and Tuesday before an Atlantic system lifts output from Thursday, and gas-for-power demand is forecast to rise 30 mcm/day on the day. Intraday pricing has been exceptionally uneven, with zero-priced overnight and mid-morning periods sitting against evening ramps approaching £200/MWh on each of the last four sessions.
Other Commodities
Oil has refused to respond to the headlines. Brent M+1 settled at $102.25/bbl on Friday, down 2 per cent on the week, and WTI at $91.11/bbl, with the physical market pointing the other way from the geopolitics: Middle East crude exports ran above pre-conflict levels on four of the final seven days of September, OPEC+ left November quotas unchanged at the weekend, and the G7 agreed to release 100 million barrels of emergency crude and diesel reserves. Coal firmed slightly, with API2 ARA Cal-27 at $137.18 per tonne, up 2.2 per cent on the week. Carbon was weaker on both sides of the Channel, EUA Dec-26 easing €1.22 to €84.42 per tonne as the compliance cycle closed and UK ETS Dec-26 down £1.21 to £60.98 per tonne, though UKAs outperformed over the week and narrowed their discount to EUAs to around €12.70 per tonne. In global gas, JKM November settled at $25.68/MMBtu while Henry Hub eased to $3.04/MMBtu, and sterling firmed modestly to 1.3241 against the dollar and 1.1760 against the euro.