Energy Market Report - 12 October 2026
Escalating conflict in the Gulf pushed UK and European energy prices higher into the close last week, with renewed Houthi strikes on Saudi Arabia and an Iranian claim of responsibility for an attack on an LPG carrier keeping a firm risk premium in gas, power and crude. The one exception was UK day-ahead power, which collapsed for weekend delivery as wind and solar output surged against low demand.
Natural Gas
Gas prices rose on Friday and have extended higher this morning, driven almost entirely by supply risk rather than any deterioration in fundamentals. UK day-ahead NBP settled at 195.90 p/therm, up 8.65 p/therm on the day, with November 26 adding 6.89 p/therm to 202.56 p/therm and trading back above 200 p/therm at this morning’s open. TTF day-ahead settled at €82.35/MWh, up €3.80/MWh and briefly above the front month ahead of the weekend. The physical position remains comfortable: Norwegian nominations are running at 333.7 mcm/day this morning despite reduced output at Gullfaks and a process issue at Kårstø curtailing 15.9 mcm/day, Langeled is up 6 mcm/day to 75 mcm/day, and the UK system opened 32 mcm/day long against demand of 136.49 mcm/day. LNG sendout is nominated 2 mcm/day lower at 8 mcm/day, though seven cargoes are due into north-west Europe through 19 October, five of them from the United States. Further out, Winter 27 has settled at 142.94 p/therm, close to 35 per cent above its end-August level, and the curve carries an unusual inversion with Summer 27 at 150.42 p/therm trading above Winter 27.
Electricity
UK power diverged between the prompt and the curve. Day-ahead baseload settled on Friday at £33.89/MWh, down £43.21/MWh for weekend delivery, with peak below baseload at £27.31/MWh as strong wind and solar met weak demand. That has already reversed, with current offers back around £131/MWh as renewable output fades into the working week. Forward power followed gas and carbon higher, with November 26 baseload up £4.15/MWh to £162.50/MWh, January 27 the peak at £174.18/MWh, and Cal 27 at £129.38/MWh. Clean spark spreads for November are within about £1/MWh of breakeven, which leaves the system with very little thermal buffer and explains the violence of the intraday swings: Sunday’s evening peak held between £229 and £254/MWh for eight consecutive settlement periods, while this morning ran to £241.55/MWh before collapsing to £73.00/MWh by 09:00 as solar arrived. Nuclear availability is a standing constraint, with two Heysham units fully offline, a third derated and an unplanned Hartlepool 1 outage from 8 October. Continental prices offer limited relief, with German November baseload quoted near €190.90/MWh and only France materially cheaper.
Other Commodities
Brent M+1 settled at $104.72/bbl, up $0.44 on the day and 2.4 per cent on the week, with WTI at $91.85/bbl; Brent is quoted around $104.30/bbl this morning after retracing a sell-off prompted by the announcement of an energy infrastructure ceasefire between Russia and Ukraine, the detail of which remains unconfirmed. Coal API2 ARA Cal 27 gained $1.39 to $141.85/tonne, up 3.4 per cent on the week. Carbon was the week’s main story: EU allowances for December 26 settled at €86.94 per tonne, close to 3 per cent higher on the week, while UK ETS December 26 settled at £64.09 per tonne, marginally softer on the day but roughly 5 per cent higher on the week and at an eight-month high after reports that the UK and EU intend to link their emissions trading systems. The UKA now sits at a discount of around €11.3 per tonne to the EUA, and any firming of the linkage proposal would compress that gap and raise UK power curve costs. In LNG, JKM for November rose $0.96 to $27.60/MMBtu, holding a premium of roughly $2.00/MMBtu over north-west European cargoes, while Henry Hub November settled at $3.22/MMBtu. Sterling was unchanged in effect at 1.1798 against the euro and 1.3231 against the dollar.