Looking back, September was a notably stable month for UK gas and power markets, with prices holding steady amid a quieter backdrop on both the fundamental and geopolitical fronts. Shifts in supply were largely offset by corresponding changes in demand, and vice versa, keeping the system well balanced. Keep reading for the details on key drivers shaping gas, power and weather trends.

As September began, the UK gas system remained relatively well balanced with demand, supported by higher Norwegian imports and steady domestic output. By mid-month, cooler weather lifted demand and tightened the UK’s gas balance, though this was partly offset by improved Norwegian supply as maintenance on the Langeled pipeline eased – boosting imports by 12mcm/d to 48mcm/d.

Moving into the second half of the month, warmer temperatures and stronger wind generation pushed prices lower. Even so, ongoing maintenance at Norwegian facilities like Kollsnes, Nyhamna, and Kårstø limited exports, tightening supply and adding mild upward pressure to prices. Gas storage injections across Northwest Europe slowed, with weaker supply from Norway and LNG outweighing lower demand.

Prices across Europe moved largely sideways through late September, with only minor reactions to maintenance schedules, temperature shifts, or new LNG nominations. However, as temperatures dropped by around 5°C across the UK and NWE, residential heating demand surged with the UK seeing a 27% increase. Norwegian flows rebounded but couldn’t fully offset stronger demand and weaker LNG sendout.

Toward the month’s end, minor maintenance extensions and strikes at French LNG terminals supported prices, while forecasts for milder, windier weather capped gains. Overall, the UK remained comfortably supplied, with increased domestic production and modest storage injections keeping the system stable.

Several strikes took place at French and Belgian energy facilities throughout September, protesting the government’s proposed budget cuts. This included disruption at the Dunkirk LNG terminal, which is the second largest in continental Europe and the only terminal directly connected to two separate markets (Belgium and France), accounting for about 20% of both countries’ annual gas consumption. The combined effects of strikes and infrastructure disruptions led to increased wholesale electricity prices in France and some surrounding areas. For instance, on September 18^th, French baseload electricity prices rose by 21.7% to €59 per megawatt-hour, influenced by reduced nuclear power availability due to strikes and decreased wind energy generation.

September was another eventful month in terms of Geopolitics, although there was minimal tangible impact on the UK market. Early in the month, Beijing hosted a large military parade that underscored growing cooperation between China and Russia. During Russian President Vladimir Putin’s visit, he and President Xi Jinping agreed to expand gas supplies via existing pipelines and confirmed plans to build the Power of Siberia 2 project. Additionally, reports showed the first LNG cargo from Russia’s Arctic LNG 2 project arriving in China in late August, with at least 3 additional cargoes having arrived since, marking a significant step in Moscow’s pivot toward Asian energy markets.

Meanwhile, the European Commission proposed its 19th package of sanctions against Russia, including a move to advance the ban on Russian LNG imports to early 2027– a year earlier than previously scheduled. This acceleration follows pressure from Trump on allied nations to curb Russia’s energy revenues as part of the effort to end the ongoing war with Ukraine – a resolution that for now appears distant.

Later in the month, Trump adopted a tougher stance, declaring that Ukraine was “in a position to fight and will regain all its original territory.” He also voiced support for NATO forces taking defensive action against Russian aircraft violating alliance airspace and called on the UN to impose stricter sanctions and tariffs – not only on Russia, but also on countries like China and India that continue to facilitate its trade. Given this, a return to normal Russian gas flows into Europe remains unlikely in the near term, limiting the potential for any significant downward pressure on prices from this area of the market.

The onset of meteorological autumn in September brought cooler weather and robust wind generation, keeping overall conditions close to long-term averages. Toward the end of the month, however, temperatures dipped below seasonal norms, increasing heating demand. A concurrent drop in wind output tightened supply margins, applying modest upward pressure on energy prices.

Looking ahead to October, temperatures are forecast to decline in line with seasonal normal, aside from a short-lived cold spell anticipated toward the end of the month. Should these colder-than-average conditions materialize in the final week, heating demand will likely rise, potentially putting upward pressure on prices. So far in October, the first named storm of the season- Storm Amy– has brought exceptionally strong winds, leading to a surge in wind generation and brief periods of negative power prices across England. Outside of this event, wind output is expected to remain relatively subdued, increasing reliance on gas-fired generation and offering bullish support to prices.