Mon, 28th Sep ’26

Bias: NEUTRAL to BULLISH

GAS

Last week saw front-end delivery prices drop off by as much as 9% amid renewed diplomacy and associated optimism – however, by the weekend, Trump had rebuffed Iran’s proposed seven-day framework proposal to reopen the Strait of Hormuz telling reporters outside the White House that Tehran “want to make a deal where they open the Strait immediately because they’re losing so badly”. Not surprisingly, markets were up at this morning’s open.

The global oil benchmark (Brent Crude futures) also spiked to $106/barrel at the opening bell amid heightened supply security security risks with Saudi air defenses intercepting Houthi drones over Riyadh.

The Strait of Hormuz languishes at a relative standstill. Along the stricken waterway, LNG transits remain under Qatari force majeure, whilst crude continues to rely on shuttle vessels to load outside of the waterway.

European storage fullness is at 71% versus the 5-year average of 87% – though it’s worth noting that French storage stands at 83% and Italy at 87% (whilst Germany sits at 58%, the Netherlands at 58%, and the UK at 31%).

Notably, France increasingly re-exports liquefied natural gas (LNG) to the rest of Europe after receiving it at coastal terminals then regasifying and sending out to its landlocked neighbours via pipelines (primarily Switzerland, Italy, Belgium, Germany, the Netherlands, Spain, and Luxembourg). Given it’s location and LNG facilities, France has become one of Europe’s largest entry points and importers from the US and Russia.

Last week, traders were able to use a welcome dip in prices to further scale-in Winter-26 hedges.

Monthly Day-Ahead Averages for September to date remain below Monthly Forwards – so, as was the case in Winter-22, it looks increasingly likely that Day-Ahead prices throughout Winter-26 may outperform the winter delivery forward prices we’ve seen over the last few weeks.

To clarify, Monthly Day-Ahead Averages for September so far are at 188p/therm (or 6.4p/kwh exc. non-gas) – the highest level we’ve seen since Dec ’22 (at the height of the crisis, post Ukraine invasion etc.)

Friday’s Seasonal Forward closing prices were almost flat on the week, but up versus 1-month/3-months/6-months ago:

ELECTRICITY & CARBON

Far-curve Forward prices (available to secure now) are at almost a 60% discount versus Winter-26 delivery – this reflects the market’s underlying hopes that life will return to normal as and when (if) Trump loses his grip on power beyond the November mid-terms.

Electricity remains at a comparative discount to gas, this is down to solid renewables outputs limiting gas for power burn over the summer months – though of course this will change when the days get shorter and the wind drops.

On the Carbon side of things, mid-price Dec-26 UKA delivery sits at at £58.96/tn (and the spot is at mid 57s) – prices dropped last week amid falling gas prices (and the likelihood of industrial demand destruction if prevailing prices remain elevated across the winter).

UK electricity Monthly Day-Ahead Averages for September so far are at £134/mwh (or 13.4p/kwh exc. non-energy).

Last week, traders were able to use a welcome dip in prices to further scale-in Winter-26 hedges.

Monthly Day-Ahead Averages for September to date remain below Monthly Forwards – so, as was the case in Winter-22, it looks increasingly likely that Day-Ahead prices throughout Winter-26 may outperform the winter delivery forward prices we’ve seen over the last few weeks.

As per the chart below, Winter-26 prices rolled over to finish last week amid optimism that the Strait of Hormuz might re-open in the short term: