November energy briefing
Your straightforward insights into a complex energy market.
October delivered a largely stable, sideways UK energy market, with steady supply–demand dynamics and modest month-on-month losses, including a 20-month low. A brief 9% mid-month spike, driven by Qatar’s temporary maritime suspension, cooler forecasts, and weaker renewables, quickly reversed as bearish fundamentals returned. A warmer-than-average start to winter reduced heating demand and reinforced overall market softness.
Supply and demand
Early October was characterised by bearish price pressure, supported by expectations of high wind output from Storm Amy, alongside rising Norwegian gas production. Mid-month saw a temporary shift in sentiment, with the week commencing October 13th opening stronger due to intensified Russian attacks on Ukrainian energy assets, before easing later in the week as improving LNG availability stabilised the outlook. Following this, modest bullishness (upward price movement) re-emerged mid-month as planned maintenance in the UK and Norway curtailed 82mcm/d of flows, tightening the balance between supply and demand.
By late October bearish momentum re-emerged, with warmer weather and a rebound in Norwegian exports weighing on UK prices. The decline accelerated on October 31st, when the early end to Troll maintenance boosted Norwegian gas deliveries to Europe. This, along with lower LDZ demand, improved wind output, and a significant increase in Europe’s LNG imports versus last year, further reinforced the downside.
Geopolitics
Geopolitics continued to impact energy prices throughout October, although to a lesser extent than previously observed. The month opened with EU leaders meeting in Copenhagen to address defence cooperation following Russian airspace incursions and drone attacks in Denmark, a factor contributing some bullish pressure to the market. We also saw renewed Russian strikes on Ukraine’s gas and power, with Naftogaz reported “significant damage,” and Ukraine signalling that it may need to increase gas imports by 30%, providing further bullish support.
A temporary easing of geopolitical tensions emerged on October 9th when Israel and Hamas agreed to the first phase of a ceasefire and hostage release deal. However, attention quickly shifted back to Russia by mid-month when the UK imposed new sanctions on Lukoil and Rosneft. Around this time, strikes on Ukraine’s energy infrastructure grew more severe, aligning with Zelensky’s scheduled meeting with Trump about potential US supplies of Tomahawk missiles. Trump had previously suggested that his conversations with Putin were yielding “great progress,” yet their follow-up meeting on October 22nd fell through after Russia reportedly made untenable demands. As a result, prospects for near-term diplomatic progress diminished, taking any remaining bearish sentiment with them.
Tough sanctions against Russia continued into late October, with European Commission formally committed to ending Russian gas imports by January 1st, 2028, shortly followed by the adoption of the EU’s 19th sanctions package, featuring a ban on Russian LNG, after Slovakia dropped its resistance. Following this, Trump heightened US pressure by sanctioning Russia’s two biggest oil companies, which strengthened bullish sentiment in UK markets. Overall, October saw a tougher stance toward Russia from both the UK and the US, as it became increasingly clear that earlier diplomatic efforts were unlikely to deliver the desired results.
LNG and storage
LNG and storage dynamics continued to play a pivotal role in energy price dynamics last month. Early October saw a force majeure at Dunkirk LNG following a national strike in France, though the impact was minimal. Meanwhile, LNG Canada offered contrasting signals, with Train 2 starting up while Train 1 struggled with technical problems. Demand dynamics also shifted, as Europe and Asia intensified their competition for winter cargoes. Europe’s need to reach 90% storage before December added urgency to procurement efforts, even as that goal appears increasingly unobtainable with forecasts suggesting that aggregate Northwestern European storage levels will end November 71% full. Also, Qatar’s short-lived halt of shipping through the Strait of Hormuz further tightened perceptions of near-term supply. However, by month end LNG dynamics exerted downward pressure on prices, helped by robust import flows and greater regasification availability across Europe.
Monthly price change
(1st October vs 31st October):
| Price | Monthly Change | |
| UK S-26 power | £71/MWh | ▼ 2% |
| UK S-26 gas | 75p/thm | ▼ 3% |
| Carbon | £56/t | ▲ 4% |
| Oil (Brent) | $65/bbl | ▼ 3% |
Weather update
Following a September marked by unsettled conditions and above-average rainfall, October continued the theme of variability, with some regions experiencing notable warmth and others seeing persistent wet spells. October’s temperatures were above the long-term average for most regions, continuing the trend of warmth seen earlier in the autumn. This eased gas demand for heating, therefore facilitating the downward price movement seen throughout the month.
Looking ahead to November, conditions are expected to be generally above average except for a cold spell between November 16th-26th. In this period, conditions are forecast to drop from 5C above seasonal normal on November 12th to 5C below on November 20th, and with this gas demand will likely increase significantly. Beyond this, temperatures are expected to be generally chilly throughout December, with forecasts suggesting conditions will track just below seasonal normal for most of the month, although no significant cold spells are forecast currently.
Touching on renewables, wind and solar generation are expected to oscillate around seasonal normal, with a slight lean towards lower-than-average output. As such, the fundamental outlook from a weather perspective is slightly bullish for the coming month, based on current forecasts.
