The modest drift lower that characterised the second half of September has reversed, with UK gas front month contract gaining around 7% over the last week as the Winter 26 delivery season began. More telling than the move at the front of the curve is movement further into the future, with contracts for delivery two, three and four years out climbing to their highest levels since 2022 and 2023.
Prices for this winter rose on familiar short-term triggers; a cold snap arriving alongside a lull in wind generation, but the strength further out reflects something slower. The market has seemingly stopped expecting the current Middle East conflict to be resolved quickly, and has begun to price in an extended shut-in of Qatari gas as the base case scenario.
UK gas for November delivery closed at 188p/th on Tuesday 6th October, 7.4% above the level at the time of our last update, with the first quarter of 2027 at the same level. Summer 27 was the standout, gaining 11.7% on the week to 143p/th, a three and a half year high.
Power followed, the November contract closing at £153/MWh and Q1 27 at £156/MWh, gains of 5.5% and 6.8%. Further out, Winter 27 gas at 137p/th reached its highest in just under four years and Winter 27 power at £113/MWh a near four-year high. These are contracts for delivery long after the crisis might previously have been expected to have passed, so gains in price here indicate that the market no longer treats a settlement as imminent.
The reason for that pessimism was set out by US President Donald Trump, who told reporters that “We have to make that decision: We blow them up or make a deal.” The Wall Street Journal reported that Mr Trump expects to resume bombing Iran by the end of November, with a third aircraft carrier and around 10,000 additional sailors and Marines due in the region by then. Tehran gave no ground, with Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, insisting that “Hormuz will not be opened by threats or pressure. Iran will not back down.” Attacks on shipping intensified, with six vessels struck in the Strait of Hormuz in a single week, among them a supertanker that caught fire off the coast of Oman, taking the running total of conflict-related incidents to 110.
Despite the increase in attacks, gas flows from the Persian Gulf have genuinely improved, with nineteen LNG cargoes crossing the Strait during September, the highest monthly total since the war began. The scale of the reduction in volumes versus pre-war levels remains huge, however, with Vitol chief executive Russell Hardy noting that Middle East LNG production is running at about 25% of capacity, and Europe having taken no Qatari cargoes at all since April.
Closer to home, temperatures were forecast to fall from around 15°C at the start of the week to around 9°C by Thursday 8th October, below the 30-year normal, lifting heating demand. Following the conclusion of the second shoulder-period planned maintenance regime, Norwegian supply at least has recovered to near peak at around 330mcm/d following the clearing of the Troll compressor failure.
European gas storage reached 72.67% on Monday 5th October, the continent having ended September at its lowest for the date since records began in 2011. Germany, the laggard at 59.04% against 85.19% in France, has responded with a rare direct intervention, instructing state-owned trader SEFE to buy and store an additional 8TWh by 15th December, although this is a relatively insignificant volume in the context of Germany’s overall 247TWh of technical gas storage capacity.
On the speculative side, investment funds added to both their bullish and bearish positions on the TTF in the week to 2nd October, but added more of the latter, leaving net length 3.5TWh lower at 161.0TWh. Net length, the funds’ bullish bets less their bearish ones, has now fallen for six consecutive weeks even as prices turned higher, pointing to profit-taking rather than fund managers having any conviction that the war is ending.
Copyright © 2026 Energy Live News LtdELN