This week has been marked by exceptionally warm temperatures across Europe and healthy wind generation, with both demand and prices reacting accordingly: UK day-ahead gas fell to 67.00 ppt and power to £58.03/MWh. Despite these favourable conditions, gas withdrawals from European storage sites have remained steady over the past two weeks, with inventories declining to 71.6%, (down 6.0%), still around 10% below levels seen at this time last year. Weather forecasts indicate a gradual return to seasonal temperatures, and the prospect of a Russia–Ukraine peace agreement remains unlikely in the short term. As a result, we think there is limited scope for prices to fall meaningfully in the near term and view current levels as a good opportunity to increase hedging for the upcoming quarters, while maintaining a bearish longer-term outlook given expectations of rising global LNG supply. 

Crude prices eased week-on-week as market focus shifted back to Russia–Ukraine peace talks. The outlook remains bearish, with weak Asian demand, rising global supply, and a soft macro backdrop. 

The International Energy Agency has raised its forecast for global oil demand growth in 2026 while lowering its supply growth expectations, resulting in a slightly smaller projected surplus for next year, as sanctions on Russia and Venezuela continue to curb exports. 

UK Wind Power Generation Record Broken Again!

On Monday, wind power generated in the UK hit an all-time high, producing enough clean power for over 23 million homes. The National Energy Systems Operator (NESO) confirms a record generation of 23,825MW, beating the previous record set less than a month ago, and that wind was providing 47.4% of the UK's electricity at the time!

Renewable and low-carbon energy sources now produce 60% of UK electricity with the 47 operational offshore wind farms supplying 17% of the national electricity generation and government aims to further quadruple offshore wind capacity by 2030.