Energy Market Report – 11 February 2026
Energy markets saw broad-based losses on Tuesday as gas, power and carbon all moved lower in tandem, before a partial recovery this morning on expectations of cooler weather into the weekend. UK carbon was the standout mover, with UKA futures collapsing roughly 20 per cent over two days to their lowest level since April.
Natural gas prices softened sharply through Tuesday's session as revised temperature forecasts for north-west Europe came in above the five-year average, trimming near-term heating demand. The NBP day-ahead settled at 79.25p/therm while the front-month March contract dropped 4.50p/therm to 74.45p/therm; TTF March fell around 5 per cent to €31.85/MWh. This morning, prices have edged higher as the UK system opened 4 mcm long with total demand at 277 mcm – some 35 mcm below seasonal normal – and temperatures are expected to fall from tomorrow, reaching around 3°C below the seasonal norm by the weekend. LNG continues to provide a comfortable supply cushion, with three vessels circling offshore and a further 11 expected over the next fortnight. Total UK LNG send-out stands at roughly 110 mcm/day, though Isle of Grain reduced output by 5 mcm/day. Norwegian exit nominations are steady at around 337 mcm/day, though a planned outage at Kårstø beginning today will trim capacity by 7.6 mcm/day and Langeled flows to the UK have dipped to 60 mcm/day. Further along the curve, Summer-26 shed 2.85p/therm to 71.27p/therm – its largest daily move so far in February – while Winter-26 fell 1.93p/therm to 76.39p/therm. European storage remains the key swing factor, sitting at just 36 per cent, well below the seasonal average, and Germany's market manager has flagged that refilling this summer will be challenging given the absence of a meaningful summer–winter spread to incentivise injection.
Power tracked gas lower on Tuesday, with losses amplified by bearish moves across carbon, coal and crude. The UK day-ahead baseload settled at £85.80/MWh, down £3.70, while the front-month March baseload fell over 6.5 per cent to £75.16/MWh and Summer-26 baseload dropped to £68.54/MWh. Wind generation averaged 10.9 GW against 13.3 GW from CCGT, with a slight uptick in nuclear output – up 0.5 GW versus the prior week – adding to the bearish tone. Curve contracts saw significant losses of 3 to 5 per cent across the board. Wind speeds are forecast to increase and hold above seasonal normal next week, which should drive higher renewable generation and further reduce reliance on gas-for-power. However, the upcoming cold snap – with UK temperatures forecast at 2–3°C over the weekend – could tighten evening peaks temporarily. Nuclear availability remains constrained, with Heysham 2 Unit 7 due to begin a planned 27-day outage from 13 February and Torness Unit 2 offline until April.
In other commodities, carbon dominated the session. UKA December 2026 futures fell 6 per cent on Wednesday to £48.73/tonne, extending a two-day collapse of roughly 20 per cent and touching their lowest level since April. The UKA–EUA spread has blown out to its widest in months, driven by sterling weakness, expectations of a Bank of England rate cut in March and fund liquidation of long positions. EUA December 2026 settled at €78.86/tonne, down around 3 per cent on the day but holding up considerably better than the UK market. Until progress is made on UKA–EUA market linkage later this year, the spread is likely to remain wide and volatile. Brent crude firmed modestly this morning to around $69.60/bbl after President Trump reiterated warnings of further US naval deployment to the Middle East, though time spreads remain flat and physical differentials continue to signal comfortable supply. Coal benchmarks edged lower, with API2 Cal-27 settling at $103.33/tonne. Elsewhere, the UK government awarded a record round of contracts-for-difference covering 4.9 GW of solar, 1.3 GW of onshore wind and 21 MW of tidal, though grid connection delays affecting nearly two-thirds of advanced projects temper optimism about delivery timelines.