Headlines:
- A possible meeting between the US and Iran this week.
- The conflict in the Middle East is expanding across the region.
- EU Gas Storage levels remain a concern as we approach winter.
On Monday the 21st of September, Gas and Electricity Year Ahead Wholesale costs were lower than last week. There are small increases this morning. Oil is lower at $101 from $108.
The possibility that the presidents of the US and Iran may meet, caused a price correction on Monday, reversing some of the recent gains.
The underlying issues remain. The war in the Middle East continues to disrupt Oil and LNG Exports from the region, which is now also impacting the Red Sea and some pipeline deliveries. The US could be preparing for military action against the Iran backed Houthi rebels. Global supplies are tight, which is creating competition. For Gas this means the EU will begin the heating season from October, with Gas Storage just above 70% full, well below target and compared to 94% in 2024. Imports of Gas will be restricted further from January 2027, when the EU’s full ban on Russian LNG begins. Any reports of a harsh winter across Europe will likely cause a spike in prices.
The last week saw Gas provide 18% of generation, Wind 39% and 10% via the Interconnectors.
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.
