UK Gas Hits Near 4-year High

UK natural gas prices dropped below 250 pence per therm on Monday as diplomatic efforts in the Middle East helped ease concerns over further escalation, although prices remained near a multi-year high amid winter supply fears. Iranian negotiators held a third consecutive day of talks with Qatari mediators in Doha on Sunday, seeking to reach an agreement to end the war. Meanwhile, US Secretary of State Marco Rubio said on Saturday that diplomatic contacts with Iran remained active and that President Trump had yet to decide on fresh strikes against Iran. However, Iran's Supreme Leader warned the US and Israel against launching further attacks. Gulf LNG supplies remain severely disrupted amid security threats around the Strait of Hormuz. The UK is expected to depend more heavily on LNG imports this winter, increasing its exposure to potential price spikes amid tight global market conditions, despite recent additions to domestic supply.

UK Gas increased to 243.55 GBp/thm, the highest since December 2022. Over the past 4 weeks, Natural Gas UK gained 37.91%, and in the last 12 months, it increased 191.17%.

UK natural gas prices climbed above 250 pence per therm, reaching a fresh 2022 high amid tightening global supply. Ongoing disruptions to LNG supplies from the Middle East have driven British gas prices to three times their levels at the start of the year. Adding to concerns, gas output in the North Sea, which accounts for about a third of the nation’s winter demand, is projected to fall by about 5%, according to the UK’s gas-grid operator. To compensate for this, LNG imports are forecast to increase by 5%, while Norwegian pipeline deliveries are expected to rise by 1%. While the gas network operator indicated that the country would have adequate supply capacity even under worse-case scenarios, robust LNG demand could intensify competition for cargoes and push prices even higher. Meanwhile, additional production from the newly approved Jackdaw field may offer some relief, as it is expected to start supplying gas to the UK by the end of this month.