Middle East conflict lifts oil and gas

European gas prices climbed to €97 (£81) per megawatt-hour on Monday, a level last seen in 2022, as temperatures fell across the continent and traders weighed the risk of supply disruption in the Middle East. The UK's month-ahead gas contract rose 4% to 240p per therm, its highest since December 2022, when prices surged after Russia's full-scale invasion of Ukraine.

The pressure traces back to reports that:

• •the US and Israel have drawn up plans for renewed strikes against Iran after the US midterm elections

• •oil rose as high as $117 a barrel on Friday on those reports, with Brent crude retreating about 2% on Monday but staying above $114 (£85) a barrel

Gas storage at decade low

European gas storage stands at about 75% full, against a seasonal average closer to 80%, its lowest level in more than a decade. Analysts attribute the shortfall to a slowdown in exports from Qatar and to higher summer consumption for refrigeration and cooling, leaving less in store heading into winter.

UK faces Europe's highest energy costs

Britain is expected to pay some of the highest energy costs in Europe this winter, according to UK energy regulators, because of its reliance on imports. The country holds some of the smallest gas stores on the continent after decades of relying on North Sea production.

The exposure shows in recent payments:

• •a record £4bn spent on power imports in the year ending in August, per ONS figures, with half of that going on electricity imported from France

• •near-record payments over the past year to fire up gas plants, while wind and solar farms were paid to turn off because of grid bottlenecks

• •household bills predicted to rise 16% in January, reaching the equivalent of about £2,000 for a typical annual bill

Markets steady despite energy rally

Equities took the softer oil price in stride. The Stoxx Europe 600 rose 0.3% in early Monday trading, while the UK's FTSE 100 gained 0.4%.