Energy Market Update - 05 February 2026
Energy markets edged higher across gas and power on Wednesday, supported by revised colder weather forecasts for mid-February and depleted European storage levels. Heightened US–Iran tensions added a geopolitical risk premium, particularly in oil markets.
Natural gas prices corrected higher at the NBP following a selloff earlier in the week, finding firm technical support above the 70p/therm level. The NBP day-ahead contract settled at 82.90p/therm, up 2.47p on the session, while the front-month Mar-26 contract was trading near 83p/therm in morning trade. The TTF equivalent firmed to €34.37/MWh. The move was partly driven by revised weather forecasts, with the EC operational run now showing a return of colder conditions into mid-February, including temperatures as low as –6°C in Germany. European storage remains a key source of near-curve support, with aggregate EU levels standing at 39.23% as of 3 February, almost 13 percentage points below the same date last year. Net withdrawals across the continent reached 7.5 TWh in the previous session, leaving storages at roughly 448 TWh. On the supply side, Norwegian exit nominations were reported at 341 mcm/day, broadly stable, with Langeled flows into the UK rising 4 mcm/day to 71.3 mcm/day. UK system demand was forecast at 276 mcm, approximately 32 mcm below seasonal normal, while the system opened around 20 mcm long. LNG sendout eased to 97 mcm/day, with most of the reduction coming from Isle of Grain.
Baseload power prices tracked the wider energy complex higher, with the UK Mar-26 baseload contract trading at £84.50/MWh in early trade, up from a settlement of £82.88/MWh. The day-ahead baseload settled lower at £81.57/MWh, down £6.21 on the session, reflecting strong wind generation which accounted for approximately 58% of the UK generation mix overnight and into the morning. However, wind output is expected to decline from tomorrow, with gas-for-power demand on the day-ahead forecast to increase by around 12 mcm/day as a result. Nuclear availability remains heavily constrained, with Hartlepool 2 offline since June 2025 on an unplanned outage, Hartlepool 1 on planned maintenance since late October, Torness 2 offline since January, and multiple Heysham units either fully or partially unavailable. In France, EDF delayed restart dates for three reactors by roughly one week each, though restarts at Flamanville 1 and Golfech 2 provided some offsetting supply.
In broader commodity markets, oil prices spiked on Wednesday amid escalating US–Iran tensions. Brent crude settled at $69.46/bbl, a daily gain of 3.16%, after a US fighter shot down an Iranian drone near the USS Abraham Lincoln and Iranian boats threatened a US-flagged tanker in the Strait of Hormuz. Talks remain scheduled for Friday in Oman, though Trump warned overnight that Iran's leadership should be "very worried." Prices have since eased modestly as confirmation of ongoing diplomacy tempered risk appetite. Coal markets also firmed, with the ARA CIF Cal-27 contract settling at $102.05/tonne, up 3.87% week-on-week. European carbon prices edged lower, with the EUA Dec-26 contract dipping to €82.92/tonne and UK ETS Dec-26 falling to £62.18/tonne, reflecting profit-taking after earlier support and broader selling pressure linked to Trump's tariff threats against EU allies over Greenland. Currency markets were steady, with GBP/EUR at 1.1606 and GBP/USD at 1.3650.