UK Energy Market Update: 12 October 2026

The dip in gas prices didn't last. On 8 October, UK day-ahead gas settled at 187.25p per therm, while January 2027 gas was trading at 200.02p per therm. The figures refer to different contracts, but both show why winter prices remain sensitive to supply worries and global competition for LNG.

Several things pushed prices up. Shipping through the Strait of Hormuz is still badly disrupted, with attacks and attempted attacks on vessels adding to the worry. Oil jumped around 4% on 8 October. Norwegian supply is under pressure too, as the Dvalin outage was extended and output at Heidrun stayed reduced. Weather is the other thing to watch. A colder spell would lift heating demand across Europe.

Storage is improving, but not fast enough to relax

European gas storage was around 73.6% full on 11 October, against 82.9% on the same date last year. Europe is heading into the colder months with less gas in the tank than it had in 2025. Britain has limited storage of its own and leans on imported gas, including LNG, whenever demand rises or the wind drops. Disruption to global supplies can add further pressure to the UK market.

Wind helped power, but gas still sets the tone

Strong wind pushed day-ahead electricity prices lower towards the end of last week. On 8 October, day-ahead baseload power settled at £77.10/MWh after a sharp fall. More wind means less gas burned for electricity, which takes some heat out of short-term prices. It doesn't last, though. Winter electricity contracts still follow gas, and a few windy days won't change what the whole season costs.

A notable shift in US policy on Russian fuel

On 9 October, Donald Trump said Russia would supply 300,000 tonnes of diesel to the US and global markets straight away, with larger volumes to follow, and the US Treasury temporarily eased sanctions on Russian diesel until April 2027 to allow it. It's a change of direction, as Washington spent years discouraging purchases of Russian energy. This deal covers diesel, not gas, so there's no direct effect on UK gas prices yet. It does show how tight global fuel supply has become, though delivery is far from certain, as Russia has restricted diesel exports since July.

The January price cap is the next big date

Cornwall Insight expects the household price cap to rise by around 16% in January, to £1,999 a year for a typical dual-fuel household. Energy UK has separately warned that a typical household's annual bill could reach around £2,100. These are forecasts, not a confirmed cap, and Ofgem is due to announce the January figure on 25 November.

The cap only covers households, but the same wholesale gas and electricity prices also influence business energy contracts. The household forecast isn't a direct prediction of business energy prices, but it is a useful reminder to keep an eye on market movements if you've got a renewal coming up.

What this means for your business

One quiet day doesn't mean a calmer market. Last week showed how quickly relief from talk of fresh negotiations can disappear once supply worries return.

If a renewal is due in the next few months, don't wait for the next headline to make the call. Decide what price fits your budget, check how much of your future usage is still open to the market, and get contract options side by side early. It's much easier to choose when you're not up against a deadline.

What we're watching next

• Whether US and Iran talks make progress

• Tanker traffic and LNG deliveries through the Strait of Hormuz

• Whether the US-Russia diesel deal actually delivers and eases global fuel supply

• Updates on Norwegian gas outages and production

• European gas storage levels and colder weather forecasts

• NESO's fuller Winter Outlook, expected later this year

• Ofgem's January price cap announcement on 25 November

Would you rather lock in now, or wait and see what November brings? Tell us in the comments.