As we anticipated prices have continued to fall as time passes and the world adjusts to the tense situation in the Middle East.

Our view remains that the UK market fundamentals are not impacted by the Middle East situation in the mid and longer term unless sanctions are imposed on Qatar which seems unlikely as they provide 30% of the worlds LNG and have large oil reserves too.

As prices drop pick a convenient time to renew before there is more winter turmoil.  With rain forecast for the next week or so the temperatures should stay mild taking pressure off electricity supply.

Gas: NBP prompt contracts continued to see losses yesterday. Strike action by LNG workers in Australia is still on hold as talks over an agreement continue. Above seasonal wind output also helped to counteract demand increase caused by the colder weather. Gains across Oil markets caused by tensions in the Middle East weighed on the far curve.

Power: Key Power contracts fell in price yesterday. The prompt was backed by strong wind generation. Further out on the curve, losses in UKA’s helped keep prices bearish. 2 LNG cargoes are set to berth on UK shores prior to the 28th October, elsewhere the Torness Nuclear reactor in Scotland is expected back at full capacity by the 25th.

Crude: Brent crude once again breached the $90/bbl level. President Biden is due to visit Israel today in a move hoped to indirectly ease price concerns over oil, caused by Middle East tensions.

Carbon (EU ETS): The ICE Dec-23 closed at €82.55/t yesterday. Opening lower this morning, the contract is currently trading higher than yesterdays close at €82.96/t. 

Carbon (UKAs): The ICE Dec-23 closed at £48.71/t yesterday, opening lower today at £48/t flat. At time of writing the contract has seen further losses and is trading at £47.70/t