The energy complex sold off sharply on Wednesday as hopes of a US-Iran settlement took the geopolitical premium out of prices. Reports of a draft agreement presented to Tehran, combined with a Democratic win in the US midterms, pushed UK gas down around 5 per cent on the day and roughly 13 per cent over the week, with European gas retreating from the four-year highs reached earlier in the week. Oil fell hardest, with Brent shedding close to 9 per cent in a single session.
UK power followed but held up better. Day-ahead baseload slipped only marginally and the evening peak actually firmed, because the physical system is tight regardless of what the headlines are doing. Wind output has fallen, several nuclear reactors remain offline or derated, and French nuclear availability has worsened, leaving gas-fired plant setting the price for most of the day. Intraday swings were wide, with prices moving well over £100/MWh between the overnight trough and the morning ramp. Forward power eased a few per cent across the curve, with the 2027 contracts giving up around 3 per cent.
Elsewhere, coal eased modestly and Asian LNG benchmarks fell as buyers stepped back, while US gas firmed slightly. Carbon was the exception, with European allowances edging higher and UK allowances flat, leaving UKAs still at a meaningful discount to the EU market. Sterling was a touch stronger against the dollar. The near-term risk remains two-sided: colder and stiller weather is building into next week, and reports of tankers striking mines near the Strait of Hormuz are a reminder that the supply risk has not actually gone away.
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