01 October 2026

Weekly Energy Market Update 

Outlook

Drought-related constraints on hydro and nuclear generation, combined with very low wind output and high gas prices, have pushed day-ahead prices above €200.00/MWh across several North-West European markets this week. This has added pressure to forward prices, which remain volatile and highly sensitive to developments in the Middle East. So far, US-Iran negotiations have failed to allow Qatar to resume LNG exports, leaving European and Asian buyers with limited alternatives. Attention is now turning to temperatures, with the first colder-than-average conditions expected in the second half of next week, while European gas storage stands at 71.50%, up 1.1 percentage points this week.


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General Context
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UK business confidence fell sharply in September to its lowest since April 2025. Weaker economic optimism amid higher energy prices and global uncertainty drove the decline, alongside growing caution over demand and activity in the year ahead.

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Germany’s labour market remained sluggish in September, with unemployment rising more than expected while the jobless rate held at 6.4%. Inflation also picked up across several German states, while weaker retail sales pointed to continued pressure on consumption.

Oil

Brent crude is trading largely unchanged, with recovering Middle Eastern flows helping to ease supply concerns and cap further gains. Goldman Sachs estimates Middle Eastern exports reached ~23 mb/d last week, broadly in line with last year’s average, pointing to a faster-than-expected normalisation in regional oil flows.

OPEC+ is expected to hold November production targets steady, with around 2 mb/d of cuts remaining through end-2026, while an upcoming capacity review could influence 2027 quotas and the pace of further supply increases.
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Gas & Power
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December 26 UK allowances have surged around 7% to £62.50/tonne after Prime Minister Burnham confirmed that the long-awaited EU-UK summit should take place before year-end, reviving expectations of a linkage between the two carbon markets and narrowing the spread between UK and EU allowances.

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Europe is entering winter with depleted hydrological reserves, with low water levels on the Danube affecting Romania’s Cernavoda nuclear plant and countries downstream, while tight conditions in the Alps and Nordics are constraining hydropower output. In France, environmental restrictions are also weighing on nuclear availability, with curtailed capacity at 6 GW for the next few days.

Gas

QatarEnergy has extended force majeure on LNG deliveries to Edison until early December, with 6 more cargoes affected, bringing the total to 35. Meanwhile, Germany has instructed state-owned SEFE to buy and store 8 TWh of gas (around 8 cargoes) by 15th December, adding further pressure to an already tight market.

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

Launch of the Great British grid

The UK Government has confirmed plans to create the Great British Grid, a publicly owned network company within GB Energy. The new body will bring together public and private investment to accelerate critical grid infrastructure projects across the country.

 

The aim is to speed up delivery, increase competition and support the major grid upgrades needed for Britain’s transition to clean power. Industry leaders have welcomed the focus, highlighting grid connections and infrastructure delays as a key bottleneck for renewable energy projects. Faster delivery could help reduce delays and associated costs while supporting a cleaner, more secure and affordable energy system.
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