Energy Market Report - 06 October 2026
European energy markets opened the week softer as recovering Middle East supply and mild weather took the edge off prompt gas, only for the curve to reverse sharply higher on Tuesday morning. Power moved in the opposite direction on the prompt, with a collapse in wind lifting UK and continental day-ahead prices steeply even as forward contracts eased alongside gas and carbon.
Natural Gas
Gas prices eased on Monday because the geopolitical risk premium continued to drain away rather than because demand weakened. Additional laden Qatari vessels transited the Strait of Hormuz and Middle East crude and LNG flows kept rebuilding, while Norwegian deliveries held stable at 329 mcm/day on Gassco's figures. NBP day-ahead fell 2.50p to 179.00 p/therm and front-month November declined 4.51p to 183.59 p/therm, with TTF day-ahead easing around 2.2 per cent to near €73.4/MWh and TTF November at €73.51/MWh. The physical backdrop remains comfortable, with UK LNG sendout steady at 8 mcm/day and ten cargoes scheduled into north-west Europe between today and Friday. The constraint is inventory rather than flow: European storage sits at roughly 72.7 per cent full against a five-year average closer to 87 per cent, and the UK at 32.4 per cent is well behind France at 85.2 per cent and Italy at 88.0 per cent. Prices have firmed this morning, with day-ahead indicated at 185.60 p/therm and November at 190.71 p/therm, and the Commission's proposal to delay methane import obligations by a year has removed one near-term cost from suppliers into Europe.
Electricity
UK power diverged from gas on the prompt as wind generation fell away, with output troughing near 2.9 GW on Tuesday and Wednesday. Day-ahead baseload settled £19.66 higher at £171.61/MWh and peak at £177.07/MWh, while German, French and Dutch day-ahead all cleared above €200/MWh. Monday's intraday shape was the opposite, with system prices negative across nine consecutive settlement periods in the middle of the day, bottoming at minus £28.49/MWh, before the evening ramp drove the buy price to £249.00/MWh. The forward curve moved lower with gas, November baseload falling £3.71 to £149.23/MWh and Q1-27 to £151.48/MWh, though thin generation availability caps the downside: Heysham 2-8 has been off since early September, Heysham 1-1 entered a 96-day planned outage on 3 October, and in France a 24-hour EDF strike and an extended 3 GW Chooz outage qualify a nuclear recovery to around 38 GW, with hydro stocks 23.6 percentage points below normal. Interconnector flows were close to neutral, leaving the UK little imported cushion, and Wednesday day-ahead is already offered near £160/MWh as wind rebuilds towards 16 to 17 GW.
Other Commodities
Crude softened on improving supply despite the Middle East backdrop, Brent M+1 settling $1.93 lower at $100.32/bbl and WTI at $89.43/bbl, with Brent trading below $100/bbl on Tuesday morning and down 4.7 per cent on the week. Regional exports have recovered to around 17.5 million bpd, close to pre-war levels, Saudi Arabia has cut official selling prices to Asian buyers and the G7 released emergency stocks, though Iranian exports remain at zero under the US blockade. Coal API2 ARA Cal-27 firmed $0.83 to $137.99/tonne. Carbon eased in both schemes, EUA Dec-26 down €0.55 to €83.87/tonne and UK ETS Dec-26 down £0.75 to £60.23/tonne, but UK allowances have gained 3.4 per cent in euro terms over the week against a 2.7 per cent fall in EUAs, narrowing the UK discount to about €12.77/tonne and eroding part of the cost advantage UK generators have enjoyed. In global LNG, JKM November fell to $24.95/MMBtu and north-west European LNG to $23.73/MMBtu, leaving Asia at only a slim premium to Europe and little incentive to pull Atlantic cargoes east, while Henry Hub November firmed to $3.07/MMBtu. Sterling was mixed, firmer at €1.1804 and slightly weaker at $1.3219.