08 October 2026

Weekly Energy Market Update 

Outlook

Short-term power prices have remained elevated this week, driven by low renewable output across North-Western Europe and ongoing nuclear generation constraints, with UK day-ahead baseload for Tuesday clearing at £170.62/MWh. However, strong wind generation and mild temperatures will provide temporary relief, with Saturday baseload currently trading at £40.00/MWh. Further out, prices remain supported by tight LNG supply and growing geopolitical risks. Hurricane Isaias is expected to disrupt US LNG exports for several days, while tensions in the Middle East are escalating, with tanker attacks in the Strait of Hormuz reportedly reaching their highest weekly level since the conflict began. Adding to uncertainty are reports that Syria may support Saudi operations against Yemen’s Houthis and that the White House has requested military options for strikes against Iran ahead of the 3rd November US midterm elections. 


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General Context
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UK construction activity contracted at a slower pace in September, with the PMI rising to 46.1 from 44.3 as the downturn in housebuilding eased. However, underlying demand remained weak, with new orders falling further and firms’ expectations for future activity at their lowest since May.

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The euro’s fall to a 17-month low is adding to broader economic pressures across the Eurozone, raising the cost of dollar-denominated imports, particularly oil, diesel and LNG.

Oil

Despite recovering Middle Eastern flows, Brent crude has gained around $5/bbl amid Hurricane Isaias-related US Gulf production shut-ins, reports of potential US strikes on Iran and escalating tanker attacks that could further disrupt traffic through the Strait of Hormuz.

The G7 agreed to accelerate the release of 100 million barrels of previously pledged emergency oil stocks over four months, prioritising diesel supplies. However, with no additional volumes committed and refinery disruptions and diesel shortages persisting, prices are likely to remain supported and volatile.
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Gas & Power
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UK carbon prices have risen further amid reports that a deal has been reached to link the UK and EU Emissions Trading Systems. The December 26 UK allowance contract is currently trading at £64.00/tonne, supported by expectations that linkage would bring UK carbon prices closer to those of the larger, higher-priced EU market (currently at £73.00/tonne).

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QatarEnergy’s first LNG train under its North Field East expansion project is expected to be ready for operation in November, with production scheduled to begin in Q1 2027. This would mark a major milestone in Qatar’s efforts to restore LNG output following Iranian attacks on Ras Laffan, which resulted in the loss of 17% of the country’s production capacity.

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The European Commission is considering a one-year delay to the implementation of the EU’s methane regulation for oil, natural gas and coal imports, currently due to take effect in January 2027. The move follows growing concerns that compliance costs and the risk of penalties could divert LNG cargoes away from Europe, further tightening supplies and adding to energy costs.

Current Prices
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UK Gas (NBP) - Rolling 12-Month Average
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Sustainability Spotlight

Oil refinery accused of hundreds of major pollution spills

The Stanlow oil refinery in Ellesmere Port, Cheshire, faces accusations of hundreds of pollution breaches between 2023 and 2024, according to documents obtained by investigative journalists and reported by the BBC.

The Environment Agency is investigating. Its reports show permitted limits were repeatedly exceeded, with sulphur dioxide at seven times permitted air levels, cyanide at over eight times allowed levels in the River Gowy, and oil at more than thirteen times permitted levels. Operator EET Fuels, which pleaded guilty this year to two earlier environmental breaches, called the claims "selectively chosen, historical permit exceedances" that don't reflect current operations.
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