UK energy prices continued to rise throughout the month of September, with long term prices predominantly supported by a volatile carbon market which peaked at just over €25 per tonne on the 10th September. Brent crude oil hit $82 per barrel following heightened tensions between Iran and the US over planned oil export sanctions. OPEC members and Russia met in Algiers this month where all parties agreed not to increase oil production levels. This provided further support to prices over concerns of a tightening global oil market.
Short-term prices found some support from an increase in gas demand and a reduction in renewable output as colder weather conditions start to creep in. Winter ‘18 prices saw the biggest gains due to low gas storage heading into the winter season which intensified supply concerns. This means any colder than normal weather spells over the next couple of months will likely result in price spikes.
Instead of French nuclear concerns being the headline this month, attention turned to nuclear outages in Belgium which will reportedly leave the country with a 2,000 MW supply gap this winter, increasing the risk of blackouts. Neighbouring countries have agreed to help bridge the gap but the supply concerns filtered through to support short-term electricity prices across Europe.