Energy Market Report – 23 February 2026
Gas and power prices eased at the start of the week as milder weather forecasts and a surge in wind generation offset lingering geopolitical risk from the US–Iran stand-off. Carbon rebounded after weeks of heavy selling, while oil held near recent levels amid a shifting trade policy backdrop following the US Supreme Court's intervention on tariffs.
Natural gas prices softened across the curve, with prompt NBP trading around 80.25p/therm on the day-ahead while seasonal contracts pulled back more decisively. The Summer 26 front-season contract fell 3.2p/therm from its recent highs as the 14-day demand model pointed to below-seasonal-norm consumption until at least 8 March, with temperatures across north-west Europe trending above average into late February. European storage sits at roughly 31 per cent full – below average for the time of year – with Germany and the Netherlands notably behind at around 21 per cent and 12 per cent respectively. Norwegian supply was constrained after unplanned work at Oseberg pushed NCS nominations to a multi-month low of 318 mcm/day on Friday, though Monday morning brought a recovery to 328 mcm/day as Langeled and Vesterled flows to the UK lifted to 69 mcm/day. Outages at Åsgard and Ormen Lange continue. UK LNG send-out fell sharply from 116 to 70 mcm/day, though South Hook saw a notable jump to 41.7 mcm/day. The physical supply picture remains adequate, but the storage deficit heading into injection season means the market will stay attentive to any disruption in LNG flows or Norwegian output that could complicate refill targets. Further along the curve, deferred contracts from Summer 27 onwards ticked higher, suggesting participants see value in back-dated gas given the storage shortfall and latent geopolitical tail risk from Iranian military drills near the Strait of Hormuz and the largest US naval build-up in the Middle East since 2003.
UK power tracked gas lower, with day-ahead baseload settling at £66.50/MWh – down sharply from £76.20 the session before – as wind generation surged to 17.2 GW, accounting for 44.6 per cent of the GB mix. Total renewables including solar, hydro and biomass reached 20.8 GW, or nearly 54 per cent of generation, providing the key bearish impulse. Seasonal contracts followed the prompt lower: Summer 26 baseload fell to £69.17/MWh while Winter 26 dropped to £75.44/MWh, shedding £2.25/MWh. However, curve power showed more resilience from Summer 27 onwards, underpinned by carbon costs and nuclear availability concerns. Several UK units remain offline – Hartlepool 2 has been down since March 2025, Heysham 2-7 tripped in mid-February, and Torness 2 is in planned outage until April – reducing firm baseload capacity and underscoring the fragility of the ageing fleet. French nuclear capacity looks broadly stable, supporting Continental baseload, but wind forecasts across north-west Europe are choppy for the remainder of the month, with very low-wind days expected in Germany this week and weak generation forecast for France into early March. If wind underperforms, prompt peaks could tighten quickly given the nuclear gaps.
In broader commodities, Brent crude held near $71.76/bbl, up marginally on the day, with the weekly gain of around 6 per cent largely reflecting geopolitical positioning rather than fundamental tightness as fresh diplomatic talks eased the most acute fears around the Strait of Hormuz. Coal firmed modestly, with ARA CIF Calendar 2027 at $113.91/tonne, up roughly 5–7 per cent on the week. Carbon bounced after an extended sell-off, with EUA December 2026 rising €2.44 to €73.78/tonne and UK ETS December 2026 climbing to £47.62/tonne. Both markets found support on the downside – the EUA contract has failed to consolidate below the €69 mark – though prices remain well below January highs and the recovery looks tentative without reinforcement from residual thermal load or fresh policy signals. Meanwhile, the US Supreme Court struck down parts of the Trump tariff programme on Friday, with the administration responding by signalling a move to raise the global rate to 15 per cent under alternative trade authorities – a development whose energy and commodity implications remain uncertain as markets digest the shifting trade landscape.