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Bearish Drivers

· Year-on-year weaker demand: lower residential use, reduced gas-for-power needs, and sluggish industrial consumption.
· Strong medium-term LNG supply growth supporting comfortable future storage refill.
· Comfortable UK balance and muted import incentives.

Bullish Drivers

· Tight October fundamentals: early storage withdrawals, multiple supply disruptions, and weak renewable output.
· Lower NWE storage outlook and risk of deep winter draws
· Higher winter demand risks: colder weather, rebound in LNG sendout, increased Ukrainian import needs.
· Rising Norwegian pipeline exports as maintenance ends.

October fundamentals were unusually tight this year, with gas storage shifting into net withdrawals rather than the typical October injections. A strike at French LNG terminals, reduced Fos LNG capacity after a pipeline leak, multiple unplanned Norwegian outages, and weak hydro and wind output all lifted demand. As a result, Northwest European (NWE) storage is now expected to be only 79% full on 1 November—far below earlier estimates of 90%. Our updated balance indicates storage could fall to 36% by winter’s end in the base case and to a record low of 7% in a cold scenario. Still, strong projected LNG supply growth could allow NWE to nearly refill storage by November 2026, even under high-demand conditions.

Colder seasonal weather should push November gas demand higher month-on-month, though EC46 forecasts show residential consumption still lower year-on-year. Gas-for-power and industrial demand will rise from October, but power-sector gas use remains below last year thanks to better nuclear availability and stronger wind output. Industrial demand remains weak—down 9% from 2023—as German energy-intensive sectors continue to face high costs and soft economic signals. NWE LNG sendout is expected to rebound by 50 mcm/d in November due to lower Egyptian demand and stronger North American supply. Norwegian pipeline exports should average 321 mcm/d, up 18 mcm/d from October as maintenance eases. Meanwhile, Russian strikes on Ukraine’s energy infrastructure may require a 30% increase in winter gas imports, largely met by US LNG via Poland and by Norwegian or LNG flows through Slovakia.

In the UK, November’s supply balance looks comfortable. With the NBP NOV25 contract trading roughly in line with TTF, import incentives are limited. Instead, small UK exports to the Continent are likely through the IUK pipeline—which returned to service on 21 October—when spot spreads allow. The BBL pipeline, which briefly reversed toward the UK earlier in October, is expected to remain mostly inactive.

Looking ahead to Winter 2025, the UK gas market is expected to remain broadly comfortable, supported by stable Norwegian flows and expanding global LNG supply, particularly from North America. The UK will continue to act as a marginal balancing market, with interconnector activity driven by NBP–TTF price spreads. Demand remains structurally weak, with industrial consumption subdued and gas-for-power increasingly displaced by stronger nuclear and renewable output across Northwest Europe. However, weather remains the key uncertainty: colder conditions, volatile renewables, or geopolitical disruptions—especially to LNG or Norwegian infrastructure—could quickly tighten the balance and reintroduce risk premiums.

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