Gas and power markets are largely rangebound this week, despite near-term contracts having set one-month lows on Monday. Last week’s exuberant bearishness had eased by Wednesday, leaving the front month gas contract trading near Friday’s close.
Following their gas counterparts, power contracts have also stabilised in midweek, with the first quarter of 2027 closing at £168/MWh on Monday, 8.2% lower than a week earlier, before rebounding to just under £180/MWh by Wednesday. The exception was the prompt, where day-ahead power reached £246/MWh on Monday 9th November, its highest since January 2025, as wind generation collapsed to around 1,000MW against a seasonal normal nearer 10,000MW. Elsewhere in the hydrocarbon complex, Brent crude fell to $90/bbl and Europe’s key gas benchmark, the TTF, fell to €82/MWh, having been above €100/MWh a fortnight earlier.
Markets continue to trade the possibility of a peace settlement, despite a familiar lack of material progress. Iran’s seven conditions for reopening the Strait of Hormuz remain exactly where they have spent much of the year; tankers are still being hit, and Europe’s gas storage fullness remains at the lowest level ever recorded for the date, with gas being withdrawn from storage at a faster-than-average rate.
Driving the move was a run of apparently conciliatory noises from Washington, with US President Donald Trump saying the war in Iran is “effectively over” and a resumption of strikes “quite unlikely,” citing “positive momentum” after meeting Qatari Prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani at the White House. US Secretary of State Marco Rubio added that “The economic campaign is so devastating that right now there is no need for major combat operations.”
Tehran’s response was characteristically blunt, with Iran’s top security official Mohsen Rezaei dismissing the claim that the war is over as “FAKE NEWS,” and repeating that “As long as they do not execute our seven conditions, we will neither open the Strait of Hormuz nor have negotiations.” Iranian Foreign Minister Abbas Araghchi separately denied that any meeting with US Vice President JD Vance was being planned.
The attacks continued throughout, with a vessel belonging to ADNOC Logistics & Services damaged inside UAE territorial waters rather than in the Strait itself, an apparent widening of scope. Iran claimed a further run of tankers struck by mines or set ablaze, none of it independently confirmed, and marine traffic through the Strait remains around 65% below pre-conflict levels.
On the LNG front however, the picture is genuinely better, with 31 laden tankers exiting the Strait during October, the highest monthly total since the conflict began in February. Emirati transits lifted back to pre-war levels, with Qatar’s reaching above 30% of its own. This was insufficient to prevent the International Energy Agency providing guidance that it expects global LNG supply to fall by almost 20bcm this year, a 3% decline and the steepest on record. Similarly, increased Qatari LNG flows did not prevent Poland’s ORLEN terminating one of its two long-term QatarEnergy contracts, citing QE’s force majeure, which was first declared in March and will remain in place until at least January 2027.
European gas storage stood at 72.00% on the morning of 11th November, the lowest for the date since the series began in 2011 and some 17 percentage points below the five-year average. The drawdown began on 27th October and has run at 0.21 percentage points a day, against 0.12 points a day over the equivalent period of the three preceding winters.
Closer to home, average daily temperature across the UK is forecast to fall from 7°C to around 3°C by Saturday 14th November, some 5°C below the 30-year normal, with each forecast run colder than the last. Norwegian supply has held up at around 332mcm/d despite an outage holding the Visund field at zero availability until 16th November. Cold and windless spells during the winter are one of the key risks as Europe navigates a challenging season, with resulting gains in gas demand a likely source of volatility.
Many market participants consider the recent price falls to be at odds with the supply picture, with Energy Aspects raising its average TTF forecast for December to €107/MWh and for the first quarter of 2027 to €102/MWh, both well above where the contract is trading. EA cites constrained LNG supply, low early-winter inventories and heating demand running above the ten-year norm.
On the speculative side, investment funds cut their net length on the TTF by a further 15.4TWh to 160.5TWh in the week to 6th November, its lowest since early July. Net length, the funds’ bullish bets less their bearish ones, has now fallen for two consecutive weeks, with bearish positions rising for a seventh week running, so the speculative money has been moving the same way as the price.
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