European gas and power prices extended a sharp rally into Monday’s close, driven by unplanned Norwegian supply outages and continuing disruption to LNG shipping through the Middle East, with UK and continental forward contracts setting fresh multi-year highs. Crude and coal moved the other way as reports of diplomatic talks in Tehran took some risk premium out of the oil complex, while carbon allowances rose alongside the fuels.
Natural Gas
Gas prices rose again because supply, not demand, is the binding constraint. UK NBP day-ahead settled 10.85p higher at 235.00 p/therm on Monday and November 26 added 7.52p to 238.36 p/therm, while Dutch TTF November settled around €96.70/MWh with day-ahead near €97.80/MWh. Unplanned Norwegian restrictions at Sleipner, Oseberg and Åsgard took roughly 40 mcm/day of production capacity offline, and although aggregate Norwegian flows held at 320.8 mcm/day, Gassco still shows some 37 mcm/day of curtailments this morning. UKCS output slipped to 82.50 mcm/day, the UK system is around 6 mcm/day short, and LNG sendout is expected at 16 mcm/day today against a schedule of ten cargoes into north-west Europe through month end. The wider backdrop is the Strait of Hormuz, where attacks on shipping continue to keep a large share of Persian Gulf LNG away from international markets, and Asian buyers are competing for the Atlantic volumes that remain. Storage is the vulnerability: EU inventories stand at 74.92 per cent, but Germany is at 61.65 per cent and the UK at only 40.51 per cent, with weather models showing an abrupt turn colder from Thursday.
Electricity
Power followed gas higher and was amplified by a collapse in wind output after a very windy weekend. UK day-ahead baseload settled at £109.96/MWh on Monday against £37.00/MWh on Friday, with peak at £131.00/MWh, and forward contracts pushed higher with November 26 at £189.60/MWh and January 27 at £200.01/MWh. Further out the curve steps down to £134.19/MWh for Summer 27 and £147.10/MWh for Cal 27, so the market is treating this as a winter problem rather than a lasting repricing. Nuclear availability is weak, with three Heysham units either fully or partly offline and Belgium’s Doel 4 disconnecting again until 1 November, leaving CCGT to meet the gap at a time when gas and carbon costs have compressed clean spark spreads close to break-even. There is no help available from neighbours: German day-ahead cleared up €34.51 at €155.11/MWh, France reached €161.53/MWh and the Netherlands €157.63/MWh, with all three November forward contracts above €205/MWh. Wind load factors across north-west Europe are forecast to fall to between 3 and 6 per cent from Thursday to Saturday, which points to significant balancing costs and wide intraday swings later in the week.
Other Commodities
Oil eased on diplomatic headlines, with Brent M+1 down $0.91 to $115.81/bbl and WTI off 1.5 per cent to $101.76/bbl, though Brent remains close to 6 per cent higher on the week and participants are watching whether US military action resumes after next week’s midterm elections. Coal softened, with API2 ARA Cal 27 down 1.2 per cent to $147.37 per tonne, keeping continental coal plant comfortably in merit against gas. Carbon rose with the fuel complex: EUA Dec 26 gained 2.2 per cent to €88.19 per tonne while UK ETS Dec 26 added £1.45 to £65.63 per tonne, equivalent to €78.30, leaving UK allowances at a discount of around €9.90 per tonne to their EU equivalent, slightly wider on the day. In global LNG, JKM for November is at $32.20/MMBtu against a north-west European marker of $27.44/MMBtu, while US Henry Hub at $2.60/MMBtu is down almost 15 per cent on the week, widening the incentive for US cargoes to sail to Europe. Sterling slipped on both crosses, to 1.3339 against the dollar and 1.1930 against the euro, marginally raising import costs for UK buyers.