Headlines:
- Wholesale gas prices have returned to mid-September highs.
- European gas storage remains below historical norms at 73.75% full.
- Colder weather and lower wind generation forecasts are increasing market sensitivity ahead of winter.
On Tuesday the 13th October, energy markets are continuing to react to ongoing uncertainty in the Middle East, with wholesale gas prices climbing back towards the highs seen in mid-September. Gas prices for the coming month have increased, reflecting growing concerns around winter supply and demand.
For Finance Directors and Managing Directors, the key theme is not today’s price movement itself, but what this means. The energy markets are becoming increasingly sensitive to supply risks as we move deeper into winter planning season. European gas storage levels are currently 73.75% full, significantly below the levels we saw before the energy crisis. While there is currently enough gas in storage, the margin for disruption feels much thinner than it has in recent years.
The ongoing debate around the Strait of Hormuz continues to create uncertainty. While US officials maintain that oil and gas exports are flowing, vessel traffic through the region remains well below historical norms. At the same time, Qatar, which accounts for almost one-fifth of global LNG trade, has acknowledged the impact recent attacks have had on both its infrastructure and economy. Although this does not present an immediate threat to winter supply, it serves as another reminder of how quickly global events can influence UK energy costs.
Closer to home, there is another factor worth watching. Forecasts indicate colder temperatures arriving across the UK and Northwest Europe over the coming week, alongside a period of lower-than-normal wind generation, creating an upward pressure on both gas and electricity prices.
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As we move through the final quarter of the year, now is the time to review your energy strategy for 2027. If your contracts are due for renewal in the next 12 months, understanding your options early can provide greater certainty, stronger budget planning, and reduce exposure to market volatility.
