Energy Market Report – 12 February 2026
European energy markets were rocked by a sharp sell-off in carbon on Thursday after Germany's Chancellor Merz signalled openness to revising the EU's emissions trading system. Gas held relatively steady, while power was dragged lower by the carbon rout.
Natural gas prices were broadly unchanged on the day, consolidating near this week's lows after earlier softening driven by milder forecast revisions and healthy LNG arrivals. The NBP front month was indicated around 75.40p/therm, up marginally on the previous close, with the equivalent TTF contract at roughly €32.30/MWh. Weather models show temperatures dipping into the weekend and remaining below seasonal norms through mid-February, though the 14-day outlook points to demand slipping below normal from around 22 February, capping any sustained prompt rally. Norwegian flows eased as a planned outage at Kårstø began alongside continuing maintenance at Nyhamna, reducing Langeled deliveries by approximately 7.5% compared with the prior gas day. Flows to the UK fell to 74 mcm/day, while LNG send-out at Isle of Grain also declined by around 5 mcm/day. The system remained 3–4 mcm/day long, with total demand some 23 mcm below seasonal norms. European storage stood at 36.13% as of 9 February – well below year-ago levels – and end-of-season projections remain a background concern, though the immediate draw profile has moderated with the milder outlook further out. US cargoes continued to dominate northwest European LNG arrivals, reinforcing the comfortable physical picture, while JKM pricing at a discount to TTF suggests moderate Asian pull and ample Atlantic basin supply.
Power markets followed carbon lower. The UK baseload front month dropped to around £73.90/MWh, down roughly £1.35 on the session, with the German equivalent falling to approximately €85.30/MWh. Prompt prices remained supported by below-average wind output and the continued nuclear outage schedule – both Hartlepool units are offline, Torness-2 remains out for planned work, and Heysham 2-7 enters a further 27-day planned outage from 13 February – keeping CCGT running elevated as a result. The outlook improves into next week, however, with wind generation forecast to rise above seasonal norms, which should ease residual load and reduce gas-for-power burn. Curve power softened on the session, with Summer 26 baseload at around £67.75/MWh, though the dramatic decline in carbon provided the dominant downward impulse rather than any shift in underlying thermal fundamentals.
In broader commodities, carbon was the clear story. EUA benchmarks crashed as much as 8% after Chancellor Merz told a heavy-industry summit in Antwerp that the EU should be open to revising or delaying its emissions trading system. Dec-26 EUAs fell to around €72.40/tonne – the largest single-day drop since May 2022 and a cumulative decline of roughly 15% from mid-January highs. UKAs extended their recent sell-off, with Dec-26 contracts sliding to around £50.89/tonne, compressing the UKA–EUA spread as confidence in carbon price support eroded across both schemes. Czech Prime Minister Babis added to the bearish tone, arguing that the permit price should be no more than €30/tonne. The EU Commission's carbon market reform proposal is not due until Q3, but the political signal was enough to trigger sharp deleveraging. Brent crude firmed modestly to around $69.40/bbl after President Trump indicated he may deploy a second aircraft carrier to the Middle East, adding a small geopolitical premium, though physical indicators continue to signal comfortable supply. Coal was broadly steady, with API2 Cal-27 at roughly $103.78/tonne.