UK Natural Gas Prices Remain Elevated

UK natural gas prices rose above 217 pence per therm, hovering near their highest level in almost four years amid tight supply conditions. Gas exports from the Middle East, which accounted for around a fifth of global LNG supply before the war began, remained largely disrupted, with flows approximately 80% below year-earlier levels. Britain’s limited gas-storage capacity could be depleted during an exceptionally cold winter, as unusually low European gas reserves increase reliance on imported LNG. Government data show that, as of early October, the UK had storage capacity of about 3.2 billion cubic metres, leaving the country more exposed to price shocks. Meanwhile, the approval of the Jackdaw gas field could provide some relief, which is expected to start supplying gas to the UK by the end of this month and increase output by around 6% at its peak.

UK natural gas prices rose above 215 pence per therm, hovering at their highest level since late 2022, as Middle Eastern LNG exports remained constrained and gas storage levels were still low. Shipping disruptions through the Strait of Hormuz trapped almost 20% of global LNG shipments from the Persian Gulf. Although countries including the US, Canada, and Nigeria have increased LNG exports, curtailed supplies from the Persian Gulf has intensified competition for spot cargoes, limiting availability for Europe and making it harder for the region to rebuild inventories. Europe’s gas storage facilities are around 74% full, still below historical averages. Exacerbating the problem, forecasts point to cooler autumn, which could drive up heating demand and prompt earlier withdrawals from storage. Meanwhile, growing renewable output in the UK has reduced dependence on gas-fired electricity, but the country remains exposed to fuel price swings.

UK Gas increased to 211.26 GBp/thm, the highest since December 2022. Over the past 4 weeks, Natural Gas UK gained 2.77%, and in the last 12 months, it increased 159.41%.