Headlines:
- Restrictions on Oil and Gas exports from the Middle East continue.
- EU Gas Storage is just 75% full.
- LNG is still available, but buyers are having to pay a premium.
What is driving wholesale costs higher?
On Monday the 26th of October, Gas and Electricity Year Ahead Wholesale costs were higher than last week. There are small decreases this morning. Prices into 2027 and 2028 show much better value but are also increasing. Oil is higher at $117 from $111.
It looks unlikely that there will be a breakthrough in the conflict in the Middle East, which is creating pressure on global Oil and Gas supplies. The potential for further military action by the US and Israel is another concern, as are the Houthi attacks against Saudi Arabia.
Could Europe have enough Gas in storage this winter?
Countries are competing for shipments of LNG with the EU’s Gas Storage at just 75% full compared to 83% in 2025 and 96% in 2024. Although this is unlikely to result in the need to reduce demand, any purchases of LNG will be at a price premium. The EU is still receiving Russian Gas, but LNG will end in January and all other Russian Gas by the end of 2027. The UK’s decision to approve the Jackdaw Gas Field will have minimal impact on supplies and prices this winter.
What else is putting pressure on energy prices?
The last week saw Gas provide 17% of generation, Wind 37% and 15% via the Interconnectors.
Get in touch
We would encourage customers with contracts that end in the next few months to discuss your renewals with us, and we will look to provide further advice and support as required.
