Markets This Morning
UK gas prices are continuing to edge lower in early trading, although movements remain relatively muted. The front-month October-26 contract is down by around 1.00p/th at 192.49p/th as the market continues to weigh current storage levels against anticipated winter demand, with no progress towards a resolution to the ongoing situation in the Middle East. Reflecting the market’s initial caution, Winter-26 is currently flat against last night’s settlement. Crude oil prices are also lower this morning, with reports of additional Saudi cargoes being exported via Oman continuing to ease some supply concerns. The U.S. Energy Secretary has also indicated that he expects Saudi Arabia’s East-West pipeline to return to service relatively quickly.
Yesterday in Summary
UK gas prices came under pressure towards settlement on Wednesday, with lower prices driven by news that SEFE had secured sufficient gas to meet its storage obligations and remains on track to achieve Germany’s revised storage target. This helped ease some of the storage-related risk premium built into the market. Brent crude also declined as additional Saudi cargoes through Oman eased supply concerns, while a smaller-than-expected U.S. inventory draw added further pressure. Carbon prices continued to soften alongside gas, while GB baseload power followed the broader sell-off, with higher renewable generation weighing on prompt prices.
