Escalating attacks on shipping around the Strait of Hormuz and a widening conflict in Yemen pushed European gas to fresh yearly highs into Friday’s close, with the risk premium now extending well beyond the prompt and into the next two winters. Power followed but lagged, crude settled near a five-month high before easing on news of relaxed Russian sanctions, and carbon drifted lower against the trend.
Natural Gas
Gas prices rose on Friday and have extended the move this morning, driven by a combination of transit risk in the Gulf and the loss of Norwegian supply redundancy rather than by any cold snap. UK NBP day-ahead settled at 214.75 p/therm, up 4.75 on Thursday, with front-month November at 216.40 p/therm and the Dutch TTF equivalent at €87.55/MWh; both have traded higher again in the live session, with NBP through 220 p/therm. Unplanned outages at the Troll field cut capacity by around 6 mcm/day on Friday and Saturday, and a separate curtailment at Asgard is taking 5.2 mcm/day out of the system until 1 November, though total Norwegian exit nominations have held at 339 mcm/day. The UK is comfortable physically, opening 13 mcm/day long with UKCS production at 91.4 mcm/day and ten LNG cargoes scheduled into North West Europe over the next five days, but the Continental position is tighter: EU storage is around 74 per cent full against a five-year norm nearer 89 per cent, and the injection pace has slowed by almost 30 per cent. With Asian JKM near $29.90/MMBtu, Europe is not attracting flexible cargoes cheaply, and the curve has repriced accordingly, with Q1-27 at 217.00 p/therm and Winter 27 at 156.00 p/therm, up roughly a quarter since the start of October.
Electricity
Power has risen alongside gas but with less conviction, leaving generation margins under pressure. Friday’s UK day-ahead baseload settled at £148.89/MWh for weekend delivery, which understates the underlying level: the next working day is currently offered at £177.50/MWh. Along the curve, November baseload settled at £169.20/MWh, Q1-27 at £175.53/MWh and Winter 27 at £126.30/MWh, gains of 4 to 8 per cent on the week against 7 to 9 per cent for gas, which has compressed clean spark spreads to around breakeven at the front of the curve. Nuclear availability is the main supply-side constraint, with Heysham carrying several units at reduced or zero output, EDF delaying the restart of 2.6 GW of French capacity and Finland’s Olkiluoto 3 outage extended to 7 November against Nordic nuclear availability of 51 per cent. Renewables have carried the load, running near 16 GW on Monday, but the balancing mechanism has been volatile, with prices ranging from £45.50/MWh overnight at the weekend to £254.00/MWh during Monday’s morning ramp. A strong low-pressure system is forecast to lift wind well above seasonal norms from Thursday, which should calm prompt pricing into the weekend.
Other Commodities
Crude settled Friday near the top of its range, with Brent front-month at $109.86/bbl and WTI at $101.41/bbl, before slipping to around $107/bbl this morning as the US decision to waive sanctions and tariffs on Russia raised expectations of additional barrels reaching the market; global supply had already risen 2.5 mb/d month-on-month to 102.3 mb/d in September, led by Gulf producers. Coal continued its upward drift, with API2 ARA Cal-27 at $147.14/tonne, up 3.7 per cent on the week. Carbon moved the other way, with EUA Dec-26 easing to €85.41 per tonne and UK ETS Dec-26 to £63.41 per tonne, leaving the EUA premium over the UKA at a broadly unchanged €10.27 per tonne on a common currency basis; allowances failing to track a 9 per cent weekly gas rally suggests compliance buyers read the move as a transit-risk premium rather than a lasting increase in thermal burn. In LNG, Asian JKM settled at $29.92/MMBtu, up 8.4 per cent on the week, while US Henry Hub front-month fell 3.7 per cent to $3.12/MMBtu, widening the arbitrage into Europe and Asia. Sterling firmed to 1.3328 against the dollar and 1.1850 against the euro, up 0.7 and 0.3 per cent on the week.