Energy Market Update - 08 January 2026
Gas and power firmed as storage draws stayed heavy and colder risks persisted. Supplies were steady, but weather uncertainty and policy noise kept a bid under the near curve.
Gas markets strengthened through the week. Storage withdrawals averaged about 7 TWh per day over the last ten days, a faster pace than recent years once temperatures are adjusted. That reinforced concern that summer injection needs could rise. Despite stable Norwegian pipeline supply and healthy US feedgas, traders added modest risk premia as models flipped between warmer and colder runs for next week. Summer 2026 NBP gained 0.71 p per therm to settle at 64.47 p per therm, with the balance of winter firmer on the day. Geopolitics stayed in the background but added noise, with talk of deeper US sanctions on Russian energy balanced by ongoing peace discussions.
Power followed gas higher, with thermal demand lifted by the cold start to January and a softer renewable profile during key trading hours. The week ahead UK baseload rose £3.02 per MWh to £90.48 per MWh. Carbon strength widened sparks as power outpaced gas on the prompt, and the tighter evening system saw CCGTs run harder. Intraday spreads stayed wind led. Any sustained rebuild in wind later in the week would ease the prompt quickly, but for now the stack remains tighter on colder hours.
Other commodities were mixed. EUAs extended recent gains on reduced auction supply into year end and firm compliance buying, while UKAs continued to track higher on improving sentiment around prospective market linkage. Brent was broadly stable and coal held near recent averages, leaving carbon as the main non-gas support for forward power. LNG market tone stayed comfortable, with strong US exports keeping Atlantic supply into North West Europe robust despite weather-driven volatility in prompt demand.