Wholesale energy markets took a breather on Thursday without changing course. UK gas and power both corrected lower after Wednesday’s push to multi-year highs, with prompt gas giving back a little under ten pence and day-ahead power easing by around £11/MWh, as reports of renewed US-Iran diplomatic contact briefly thinned the war premium. The relief proved short-lived. Prices are bid higher again this morning, leaving gas up close to nine per cent on the week and power firmer across the near curve.
The physical picture is doing most of the work. Norwegian supply remains constrained by a stack of planned and unplanned outages running into late November, UK storage sits at only a little over a third full against European stocks approaching three-quarters, and a blocked weather pattern has wind output across north-west Europe forecast at a small fraction of capacity into early next week. That combination leaves gas-fired plant carrying over half the UK stack at a time when nuclear availability is also reduced, with French nuclear and the IFA interconnector offering less import cover than usual. Forecasters have also raised the odds of an unusually early stratospheric warming event, which would increase the chance of a cold snap before winter proper begins.
Across the wider complex, crude held above $110/bbl and is heading for a fourth straight monthly gain on continued Middle East escalation risk, while coal was the one market to cheapen on the week. Carbon firmed slightly in both schemes, with the UK allowance holding a steady discount to the European price. Forward gas and power curves remain steeply backwardated, pricing substantial relief by 2028 and beyond, but the premium sitting on the next twelve months has continued to build. For buyers, the live question is no longer whether the front of the curve is expensive but how much of that premium unwinds if the geopolitical picture improves, and how much is now structural.
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