Weekly Market View – w/c 20th October, 2025
Weekly Market View – w/c 13th October, 2025
Market Drivers September 2025
Bearish Drivers
· Stable wholesale trading range – prices steady between 78–81 p/therm, indicating market calm.
· Higher wind generation – several weeks in September saw wind power surpass gas-fired output, reducing gas demand.
· New domestic supply – Shell’s Victory gas field began production in late September, modestly boosting capacity.
· Milder late-summer conditions – reduced heating demand, easing short-term price pressure.
· Ongoing market diversification – Europe’s LNG infrastructure expansion and coordinated EU energy policies improve resilience.
Bullish Drivers
· Low UK gas storage – inventories around 40% below 2024 levels, reducing winter buffer capacity.
· Declining North Sea production – ongoing structural decline tightening domestic supply.
· Reduced Norwegian pipeline flows – limiting regional pipeline imports.
· Reliance on imported LNG – exposes the UK to global LNG market volatility and competition from Asia.
· Geopolitical tensions – ongoing Russia–Ukraine conflict and instability in the Middle East adding risk premiums.
· European supply disruptions – French LNG terminal strikes and Rhône pipeline outage constrained continental flows.
· Potential low-wind, cold conditions – could lift gas demand for power generation and heating.
· Elevated forward prices for winter 2025/26 – reflect trader caution and tight anticipated margins.
Throughout September the UK gas market remained broadly stable, with wholesale prices hovering between 78 and 81 pence per therm. This represented a modest decline from late summer levels, suggesting calmer trading conditions after the volatility of previous years. Forward prices for winter 2025 and early 2026 stayed elevated, reflecting traders’ caution ahead of the heating season but without the sharp spikes seen in earlier crises.
On the supply side, conditions were tightening. UK gas storage levels were reported to be around 40% lower than in 2024, leaving limited buffer ahead of winter. While LNG imports continued to play a crucial balancing role—offsetting reduced Norwegian pipeline flows and declining North Sea production—domestic output remained constrained. However, a late-September milestone saw Shell begin production at the Victory gas field, adding a modest but welcome boost to UK supply capacity.
Demand patterns were volatile, influenced heavily by variable wind generation. Several weeks in September saw wind output surpass gas-fired generation, reducing gas burn for power, but overall demand remained weather-dependent. Analysts warned that low-wind, cold conditions later in the year could quickly reverse this balance, tightening system margins and lifting prices.
Overall, the UK gas market in September 2025 was characterised by short-term stability but structural fragility. Low storage, declining North Sea output, and increasing reliance on imported LNG all leave the system exposed to weather and global supply shifts. The coming winter will test this resilience, with traders and policymakers closely watching demand patterns, wind output, and the pace of storage replenishment.
European gas and electricity markets were unsettled by a mix of geopolitical and industrial events. The EU reaffirmed its plan to phase out Russian energy by 2028, sustaining strong demand for LNG imports amid global competition. Strikes at France’s Fos and Montoir LNG terminals and a late-month Rhône pipeline outage sharply reduced French gas throughput, tightening regional supply. At the same time, geopolitical tensions in the Middle East and the ongoing Russia-Ukraine war added a risk premium to gas and power prices, with electricity in key markets like Germany exceeding €140/MWh. These factors, combined with lower renewable output, underscored Europe’s ongoing exposure to supply disruptions despite its diversification efforts.
For the winter ahead, UK gas prices are expected to remain elevated but relatively stable, supported by strong LNG imports and cautious storage use across Europe. Declining North Sea output means the UK will rely heavily on imported gas, leaving prices sensitive to cold weather, low wind generation, and global LNG competition. While supplies are forecast to meet demand under normal conditions, any prolonged cold or supply disruption could trigger sharp price rises, keeping risk premiums embedded in the market.