UK gas prices fell sharply at the end of last week as liquefied natural gas (LNG) imports reached their highest level in five months, easing supply worries as winter approaches.

The UK NBP spot contract slumped by 4.5% to 214p per therm, while the Summer 2027 delivery contract dipped by 1.8% to 157.94p per therm. The December 2026 contract, now the main reference for this winter, stood at 212.25p per therm, down 5.63% on the day and 17.61% on the week.

LNG supply steps up

The fall was driven by a clear improvement in LNG availability. LNG flows through the Strait of Hormuz rose by around 15% month-on-month in October, while combined EU and UK imports increased by 16% to 8.74 million tonnes, or 11.9 billion cubic metres, marking their highest level in five months.

More supply is on the way. Six LNG cargoes are scheduled to arrive in the UK over the next week and a half, and US feed gas levels remain very strong. With Henry Hub gas near $3 per million British thermal units, the economics of shipping US gas to Europe remain highly attractive for producers, adding to the supply available to the market.

Milder weather and easing tensions

Forecasts for East Asia have also become considerably milder, reducing heating demand and the region's need to compete with Europe for LNG. East Asian countries account for more than half of global LNG imports, so even a modest reduction can release meaningful supply.

Hopes of an easing in Middle East tensions added to the downward pressure. Oil prices ended last week mostly steady as the market awaited clearer signs of a US-Iran agreement, and the prospect of a diplomatic route has since pushed crude sharply lower, reinforcing the bearish mood across energy markets.

Storage still below average

The outlook remains bearish overall, but not comfortably so. European gas storage was around 72.7% full at the end of last week, roughly ten percentage points below the same time last year and almost seventeen points below the five-year average, leaving the market exposed if cold weather arrives.

Power prices followed gas lower. The German 2027 delivery contract fell by 2.3% to 144.71 euros per megawatt-hour, the French equivalent dipped by 2.4% to 113.29 euros, and the UK December 2026 power contract stood at 174 pounds per megawatt-hour, down 4.05% on the day. This article is for information only and is not investment advice.