Snapshot - 07 October 2026
European energy markets pushed higher again on Tuesday, with the move driven by shipping risk in the Middle East rather than anything in the physical supply picture. UK gas forward contracts gained around 3 to 4 per cent on the day, with front-month NBP settling in the high 180s p/therm and winter 2026-27 contracts trading in the low 190s. Reports that an LNG carrier was struck in the Strait of Hormuz put a risk premium across the curve, and the whole 2027 complex is now some 7 to 11 per cent higher than a week ago.
Power forwards followed gas higher, with UK November baseload settling in the low £150s/MWh and the 2027 contracts up high single digits on the week. The day-ahead market moved the other way, falling more than £12/MWh as a windier forecast took the edge off near-term tightness. Intraday volatility remains extreme: Monday's system price swung from the low £120s to above £400/MWh in the evening ramp, and the previous session saw prices turn negative around midday on strong solar. Continental conditions offer little relief, with French and Spanish hydro at multi-year lows and several nuclear units offline on both sides of the Channel.
In the wider complex, Brent held just above $100/bbl, supported by Middle East tensions but capped by restored Saudi pipeline capacity and the G7 reserve release. Coal firmed and now holds a clear advantage over gas in the European merit order. Carbon was the laggard, edging higher on the day but still lower on the week, with UK allowances continuing to trade at a double-digit discount to EU allowances. Sterling was firmer against the dollar. With European storage well below seasonal norms and Germany now expected to miss its 70 per cent November target, the near-term risk remains skewed to the upside.
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