UK Energy Market Update: 27th - 31st October 2025
Forwards Fall, Day-Ahead Noise Rises—Here's What Actually Happened
Day-ahead prices were volatile (and Friday crashed hard), but that's noise. The real story: forward contracts fell consistently all week. The market doesn't believe geopolitical shocks or sanctions create lasting higher prices. Supply is improving. Demand is weak. Downside pressure continues.
This Week's Verdict
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The Real Story: Forward Prices (What The Market Actually Believes)
Day-ahead prices were volatile this week—particularly Friday, which saw wild swings. But forwards tell the real story. These are the contracts traders actually use to lock in value, and they're what matters for your renewals.
🎯 The headline: All forward contracts fell this week. Cal-26 down 2.37% (gas) and 1.48% (power). Q1-26 and Sum-26 also down 1.5–2.5%. The market's verdict: the geopolitical premium doesn't stick. Supply is improving, demand is weak, and prices should trend lower.
Day-Ahead Breakdown (Supporting Data)
DA prices are noisier than forwards, but here's what happened each day:
| Date | Gas DA (p/th) | Power DA (£/MWh) | Key Event | Forward Signal |
|---|---|---|---|---|
| Mon 27 Oct | 78.70 | 58.88 | Week opens, mixed signals | Forwards flat to slightly down |
| Tue 28 Oct | 76.28 | 59.31 | Bearish fundamentals, mild weather | Forwards pressing lower |
| Wed 29 Oct | 77.66 | 77.40 | Israeli strikes on Gaza, risk premium spike | BUT forwards didn't follow — held steady |
| Thu 30 Oct | 78.45 | 77.40 | Geopolitical tension peaks, DA hits peak | Forwards started edging down mid-week |
| Fri 31 Oct | 73.50 | 50.49 | DA crash: Norwegian recovery, LNG arriving, temps improving | Forwards confirm the trend — solidly lower |
What This Means
Friday's DA crash (gas -6.31%, power -34.81%) looks dramatic, but it's day-ahead noise driven by weather data refresh and Norwegian supply news. The forwards didn't crash—they just continued their gentle downtrend through the week. This tells us:
- Geopolitical risk (Gaza, sanctions) was priced into DA on Wed/Thu but never made it into forwards. Professional traders didn't believe it was structural.
- Friday's DA collapse reflects real supply improvement(Norwegian maintenance ending, LNG ramping) but this was already partially priced into forwards.
- The true market view is stable downside, not crash-and-recover. Forwards moving down consistently tells you that.
Weekly Averages (DA) vs Forward Reality
Day-ahead average for the week: 76.92 p/th gas | 64.70 £/MWh power
Note: This DA average is lower than last week (77.73 gas, 73.24 power), but includes Friday's anomaly. Excluding Friday would show DA at ~77.50 gas and ~68 power for Mon-Thu—showing the real mid-week trend. Forwards are the cleaner signal here.
③ What Moved Markets This Week
🔴 US/EU Sanctions on Russian Energy
The biggest story. US and EU targeted Rosneft and Lukoil (two of Russia's biggest producers) with new sanctions. Traders immediately priced in supply risk. Gas spiked 2% and power rose alongside it. However, the sanctions haven't affected actual flows yet, so by Friday the fear trade unwound.
⚔️ Israeli Strikes on Gaza
Wednesday saw escalation in Middle East tensions, threatening the ceasefire. This fed into geopolitical risk sentiment broadly and supported commodity prices. Once talks resumed Thursday, the risk premium started coming off.
❄️ Norwegian Supply Returns
Planned maintenance at Troll and Sleipner is ending. Langeled flows improving. This is a major fundamental. When you combine improving supply with milder weather forecast, the risk premium disappears fast. Friday proved that point spectacularly.
🌊 Storm Benjamin + Milder Weather
Strong winds early in the week meant high renewable generation, pushing power down. But more importantly, temperatures are 2-3 degrees above seasonal normal for the coming week. Heating demand forecast is lower. This kept prices under pressure all week.
⛴️ LNG Arrivals Ramping
More LNG cargoes arriving in NW Europe (10+ this week from US, Qatar, Nigeria). Healthy regasification at terminals. This is classic bearish for spot prices. Combined with better Norwegian flows, supply is clearly improving.
📊 Trader Positioning
The 35% power drop Friday suggests traders were holding significant risk positions that liquidated when the geopolitical story faded. This kind of one-day crash is typical of "event unwind" trading, not fundamental repricing.
Forward Curve Reaction
All forward contract periods fell 1.5–2.5% this week. Cal-26 Gas down 2.37%, Cal-26 Power down 1.48%. This tells us the market doesn't expect the sanctions or geopolitical risks to create sustained higher prices. The curve is repricing downward.
④ Forward Markets (Your Renewal Rates)
These are the prices that matter for your contract. Updated to Thursday 30 October (latest complete data).
⚠️ All Forward Periods Down This Week
Every contract from November through to next year fell between 1.5% and 2.5%. The market's reaction: the geopolitical shock was priced in too much. Supply is improving, demand is weaker, LNG is arriving. Forwards reflect that reality.
Winter vs Summer Premium
Q1-26 (winter) still trades above Summer-26, with gas showing ~9% premium (82.29 vs 75.19) and power showing ~18% premium (83.68 vs 70.48). This is normal seasonal pricing—winter demand is higher, supply is tighter. Good news for summer renewals, less good for winter renewals.
⑤ Week Ahead Outlook (Next 7 Days)
Pressures Pushing Prices DOWN
- Norwegian recovery continues: Maintenance wrapping up. Langeled and other key pipelines returning to full capacity. More supply = lower prices.
- Milder weather persists: Temperatures 2-3°C above seasonal normal through next week. Lower heating demand across all of NW Europe.
- LNG supply healthy: 10+ cargoes arrived this week, with more scheduled. Regasification capacity is utilised. No supply shocks expected.
- Wind generation recovering: After the Storm Benjamin lows, wind speeds forecast to normalise. Less need for gas-for-power generation.
- Fundamentals are solid: EU storage at 87% (well above average for this time of year). UK system balance is positive. No physical constraints.
Pressures Pushing Prices UP
- Geopolitical tail risk: While the immediate shock has faded, markets remain nervous about Russia sanctions escalation and Middle East tensions. Any new headlines will spike prices again.
- Coal and oil prices: Both stabilising and even edging higher. If crude rebounds, energy sentiment could improve and support gas/power.
- Trader positioning: Last Friday's 35% power crash was likely liquidation of risk positions. If that unwind is over, positioning could stabilise and support prices.
💡 Next Week's Base Case: Downside pressure continues. Norwegian supply recovery is a big fundamental. Milder weather keeps heating demand low. LNG is flowing. Unless there's new geopolitical shock, expect a quiet week with prices drifting sideways to slightly lower. The big move is done—now it's consolidation.
When Should You Renew? (Based on This Week)
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Weekly Price Range Summary
- Gas (Cal-26): Low 73.50 (Fri) | High 78.45 (Thu) | Range: 6.6%
- Power (Cal-26): Low 50.49 (Fri) | High 77.40 (Wed-Thu) | Range: 34.6%
- Volatility index: Power 5.7x more volatile than gas this week
Supply & Demand Status (End of Week)
Commodities Context
- Brent Crude: Ended week at £65.00/bbl (down slightly from mid-week spike on sanctions). OPEC plans to boost output.
- Coal (ARA CIF): Cal-26 at $104.40/t (stable, slight uptick on geopolitical premium).
- Carbon (EUA): £78.67/t (steady, slight downside bias with energy prices down).
LNG Market Notes
- TTF Dec-25 spot LNG pricing at $10.52/mmbtu (down from $11.04 start of week)
- LNG NWE supply remains robust at $10.28/mmbtu
- Asian LNG premium narrowing (competition from US supply returning)
📊 What this all means: Supply is healthy. Demand is weak. Storage is full. LNG is arriving. This is a classic "buyer's market" setup. Sellers have no leverage. Prices can only spike if there's a supply shock (major outage) or demand spike (cold weather). Neither is forecast. This supports lower prices next week.
This Week Proved One Thing
Geopolitical shocks are real but temporary. Fundamentals always win. Supply is improving, demand is weak, and prices are lower this week than last. Don't fight the trend—lock in your renewals while the market allows it.
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