Bearish Drivers
· Ongoing conflict in the Middle East and disruption around the Strait of Hormuz continue to threaten global gas supplies.
· Global LNG supply is forecast at 47.5 bcm in November, down from 53.1 bcm last year, with Qatari exports expected to remain constrained until 2027.
· Storage is forecast to fall from 69% at the start of November to around 60% by month-end, leaving Europe vulnerable to colder weather and supply disruptions.
· Colder temperatures and increased heating demand are expected to tighten the UK and European gas balances as winter progresses.
· Any delay to the recovery of Qatari LNG exports or further disruption to shipping through the Strait of Hormuz could drive prices higher.
· Increased domestic demand is expected to reduce UK gas exports to mainland Europe to near zero in November, with imports potentially returning later in the month.
Bullish Drivers
· Norwegian gas exports are forecast to increase to around 337 mcm/d in November, supported by strong production and reduced maintenance.
· UK gas output is expected to recover to around 78 mcm/d, with the Jackdaw gas field providing additional domestic supply as production ramps up.
· Temperatures above seasonal norms during October reduced gas consumption and helped ease pressure on the market. Continued mild conditions could limit winter demand.
· Despite a seasonal recovery, Northwest European industrial gas demand is forecast to remain 2% below last year’s levels, reflecting high energy costs, plant closures and import competition.
· Improved nuclear availability and competition from alternative power generation sources are limiting gas consumption in parts of Europe.
· A gradual recovery in Qatari exports from January 2027, alongside increased US export capacity, could improve global supply and ease price pressures.
UK and European gas markets remain under pressure as geopolitical tensions in the Middle East, uncertainty surrounding Qatari LNG exports and below-average storage levels continue to support prices. European gas prices reached new highs for 2026 during October, although milder weather and stronger Norwegian supply have eased some pressure. Storage is forecast to enter November at around 69% capacity, falling to approximately 60% by month-end as seasonal heating demand increases.
Global LNG supply is forecast at 47.5 bcm in November, down from 53.1 bcm a year earlier, as disruption around the Strait of Hormuz continues to restrict Qatari exports. A gradual recovery is expected from January 2027, but delays or further supply disruptions could tighten the market further. Strong Norwegian exports, forecast at around 337 mcm/d in November, alongside a recovery in UK production and additional supply from the Jackdaw gas field, should provide some relief. However, these increases are unlikely to fully offset the global LNG shortfall.
Industrial gas demand across Northwest Europe is expected to rise by 20% month-on-month in November as seasonal activity and heating demand increase, but remains 2% below last year’s levels. High energy costs, import competition and weak chemical-sector output continue to constrain consumption, with further production cuts possible if TTF prices remain elevated. Meanwhile, rising UK demand is expected to reduce gas exports to mainland Europe to near zero in November, highlighting the tightening domestic supply-demand balance.
Gas prices are expected to remain supported, with risks skewed to the upside as Europe enters winter with low storage and continued uncertainty over global LNG supplies. Colder weather, further disruption around the Strait of Hormuz or delays to Qatar’s export recovery could drive prices higher, while milder conditions and stronger supply could help ease market pressures.