Gas Market
Gas markets remained volatile on Monday following the previous session’s sharp correction, though prices at the front of the curve stayed elevated. Tight storage levels, ongoing weather uncertainty and geopolitical risk continued to leave the prompt highly sensitive. In intraday trade, the front-month February contract fell by almost 10% at its lows before recovering to settle 4.81p, or 4.97%, lower at 91.94p/therm. European gas storage levels slipped below the 50% threshold to 49.84%, well below the 60.97% recorded at the same point last year, increasing focus on end-of-winter storage risk. While LNG availability has improved, the market remains alert to global flow risks following recent disruption at the Freeport LNG facility in the US, which helped fuel last week’s rally. Gas-for-power demand is forecast to fall by a further 8mcm/d to 42mcm/d on the day-ahead as wind output is expected to run well above seasonal norms this week, weighing on prompt power prices, with the day-ahead contract falling 6.15p to 94.35p/therm.
Power Market
GB power prices moved lower on Monday in line with gas markets, as improving supply fundamentals weighed on sentiment. The front-month GB baseload contract fell £5.40 to £99.75/MWh, while the UK day-ahead dropped 20.77% to £98.25/MWh. Losses were driven by upward revisions to wind generation for the rest of the week, now forecast to average 14.4GW, lifting output from previously well-below-normal levels to within seasonal norms.
Carbon prices also weakened, with the Dec-26 EUA contract falling 4.24% during the session to settle at €88.11/tonne, down €3.89. Softer gas prices and warmer-than-expected weather revisions reduced the threat of a prolonged cold snap, while equity market weakness amid renewed U.S. tariff threats also weighed on sentiment.
Oil Market
Oil prices were broadly steady on Monday as easing civil unrest in Iran lowered the immediate risk of a U.S. military response that could disrupt supplies from the major producer. With that risk receding, market focus shifted to rising geopolitical tension elsewhere, particularly a developing stand-off over Greenland. Front-month Brent settled 19c lower at $63.94/bbl, with trading volumes muted amid a U.S. federal holiday. Attention turned to comments from Donald Trump, who has intensified efforts to assert sovereignty over Greenland, a territory of Denmark and a fellow NATO member. The rhetoric included threats of punitive tariffs against European allies opposing the move, injecting fresh trade risk into the outlook. Markets are now looking ahead to an emergency summit of European Union leaders on Thursday, where potential trade responses are set to be discussed.
Markets this morning
Gas prices have risen again this morning as the market retraces some of Monday’s losses. The front-month contract was last trading at 94.70p/th, having reached an early high of 96.75p/th. Further along the curve, the Summer-26 contract is also moving higher, with gains more than reversing Monday’s decline; it was last trading at 73.25p/th, above the high seen last Friday. Oil prices are flat this morning ahead of US markets reopening after the Martin Luther King holiday, with participants seeing little immediate demand impact should President Trump proceed with threatened tariffs on European countries opposing his bid to acquire Greenland.
20 January 2026
