12 month gas prices are now higher than at any point since December 2022. If your contract renews this winter, this matters to you.
The week in brief
- Wholesale gas and power rose for another week.
- An outage at Norway’s Kårstø processing plant cut gas flows to Britain and pushed European gas to new highs for the year.
- EU gas storage is around 74% full, the lowest for mid October in more than a decade.
- By Friday, the 12 month gas price was at its highest since December 2022 and the 12 month power price at its highest since spring 2023.
Market commentary
Wholesale gas and power rose for another week as tight supply stayed the main concern. Lost LNG from the Middle East, Norwegian outages and low European storage kept prices high across all contract lengths.
Monday opened with fresh worries over shipping near the Strait of Hormuz, where reports suggest attacks on vessels continue to restrict LNG cargoes from the Gulf and force some deliveries on longer routes around Africa. Qatari exports remain a fraction of their level before the war and are expected to fall again in October.
On Tuesday, an extended unplanned outage at Norway’s Kårstø processing plant cut gas flows to Britain and pushed European gas prices to new highs for the year. Prices for next month paused midweek as forecasts turned milder, but contracts for 2027 delivery kept rising through Friday.
EU storage is around 74% full, the lowest for mid October in more than a decade. That leaves little cushion if the colder end to the month that forecasters expect arrives.
In power, lighter winds midweek and reduced nuclear output meant more gas fired generation, which lifted next day prices.
By Friday’s close, the 12 month gas price was at its highest since December 2022 and the 12 month power price at its highest since spring 2023. With so little slack in the system, further supply news is likely to move prices quickly.
What this means for your business
No one can tell you where prices go next. What you can control is how exposed you are and when you make decisions.
If you are on a fixed contract
Your unit rates are locked for now, so this week’s rise does not change your current bill. It matters at renewal.
- Check your contract end date and notice period today.
- If you renew within the next 6 to 12 months, start looking at options now rather than in the final weeks.
- Fixing early is not always cheaper. Prices can fall as well as rise. The right timing depends on your budget and how much risk your business can carry.
If you are on a flexible or variable contract
Wholesale moves reach your costs faster, so a run of rising weeks feeds through more directly.
- Find out exactly how your price is set and how often it changes.
- Check whether your contract lets you fix part of your volume at set trigger points.
- Ask whether fixing some of your winter usage would give your budget more certainty. This depends on your appetite for risk.
Questions worth asking this week
- When does my contract end, and when can I start getting renewal prices?
- How much of my energy cost moves with the wholesale market?
- What happens to my budget if prices stay at this level through winter?
- Does my current contract still suit how my business uses energy?
If you run a care home, hotel, restaurant or sports club, colder months usually bring higher demand for heating and lighting. That makes these questions more pressing between now and spring.
Get the full UK Energy Market Update
Download the full wholesale market update as a PDF for your records Rybeda 21st October Weekly Energy Market Update or to share with your operations & finance team.
Not sure what any of this means for your contract?
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