Gas Market
Gas markets stabilised on Wednesday after heavy losses over the previous two sessions, with prices finding support as buying interest returned following recent declines and colder mid-month weather forecasts re-emerged across Europe. The front-month NBP Mar-26 contract rose 1.20p to settle at 79.72p/therm, while Winter-26 gained 1.45p to 76.53p/therm. Gains at the prompt were more limited, despite lower wind generation forecasts driving an increase of around 12mcm/d in day-ahead gas-for-power demand. Further upside was capped by expectations that 13 LNG cargoes will berth between 5–15 February, supporting strong LNG sendout and easing near-term supply concerns. EU gas storage levels have fallen to 39.23% full and, at current withdrawal rates, are projected to end winter at their lowest level in nearly a decade. However, market participants remain broadly confident that storage can be comfortably refilled over summer, supported by ample LNG supply availability.
Power Market
GB power prices moved higher on Wednesday, tracking gains in gas markets. The front-month GB baseload contract rose £1.08 to settle at £81.80/MWh. In contrast, the UK day-ahead price fell 6.82% to £82/MWh as stronger wind generation forecasts for Thursday weighed on prompt prices, although output is expected to ease again into next week.
The Dec-26 ICE EUA contract closed marginally lower, down 0.23% at €82.92/t, following volatile trading that saw prices range between €80/t and €83.50/t during the session. Early-year profit-taking continued to pressure prices, with Commitment of Traders data published on Wednesday showing a reduction in both total and net long positions.
Oil Market
Oil prices rallied on Wednesday, with Brent settling $2.13, or 3.16%, higher at $69.46 per barrel after reports suggested planned U.S.–Iran talks due on Friday could collapse. Markets remained sensitive to developments, with prices swinging this week between hopes of de-escalation and renewed fears of disruption to oil flows through the Strait of Hormuz, a critical export route for OPEC producers including Saudi Arabia, Iran, the UAE, Kuwait, and Iraq supplying mainly Asian markets. Support also came from supply developments, as India’s Russian crude imports fell again in January, extending declines seen since December as refiners sought alternative sources amid sanctions pressure and ongoing U.S.–India trade discussions. Meanwhile, the U.S. Energy Information Administration reported crude inventories fell by 3.5 million barrels to 420.3 million barrels last week, contrary to expectations for a 489,000-barrel build, while U.S. oil output slipped to its lowest level since November 2024 after storm Fern limited operations.
Markets this morning
Gas prices extended gains this morning, with near-curve contracts trading around 2.34p/therm higher as lingering winter risk and and below normal wind generation in Europe supported prices. The move appears largely corrective, driven by short covering and renewed focus on colder weather risks later in February rather than any material tightening in supply conditions. Oil prices, meanwhile, moved lower, falling 96c to $68.50/bbl after the United States and Iran agreed to hold talks in Oman on Friday, easing concerns that escalating tensions could disrupt crude supplies from the Middle East. Carbon EUAs have fallen slightly further with the Dec-26 contract down 55c to €82.37/tonne.
