Energy Market Update - 05 January 2026
Gas and power opened softer after early gains, as cold weather and lower wind lifted demand but strong Norwegian flows and higher UK LNG send out kept the system comfortable.
Natural gas traded mixed. NBP day ahead was 78.40 p/therm. The UK system opened slightly short, then steadied as higher Langeled and LNG nominations arrived. UK LNG send out rose to around 118 mcm per day across South Hook, Dragon and Grain. Norwegian nominations remained robust near the mid 300s mcm per day, despite a one day reduction at Aasta Hansteen and Dvalin. European storage continues to decline seasonally and is now about 61 per cent full. With temperatures below normal into mid month and wind below seasonal norms for periods, gas for power demand is elevated at times, but the overall supply picture is resilient.
Power followed gas. UK day ahead baseload cleared at £78/MWh with peaks in the low £80s/MWh as wind faded through core hours before recovering late. Curve prices eased after the open, with February near the low £80s/MWh and Summer 2026 around the low £70s/MWh. Interconnectors provided steady cover and nuclear availability was broadly unchanged, though ongoing outages at several units keep some thermal support. Forecasts show choppy wind through the week then an improvement, which should trim CCGT burn and moderate prompt volatility when it arrives.
Other commodities were mixed. Brent was about $60.75 per barrel after weekend tensions and an unchanged OPEC+ stance. EU carbon strengthened, with EUA December 2026 near €88 per tonne, while UK ETS traded around £69 per tonne. Coal API2 Cal 2027 held close to $98 per tonne. In LNG, JKM hovered near $9.8 per MMBtu, close to TTF parity, and Henry Hub was around $4 per MMBtu. Currency moves were minor, with sterling near 1.147 against the euro.
Overall, colder weather and variable wind are lifting near term demand, but strong Norwegian exports and healthy LNG send out continue to cap upside. Curve moves remain measured, with policy noise secondary to weather and flows.