Energy Market Report – 26 February 2026
European gas and power markets traded in a narrow range on Wednesday, with above-normal temperatures continuing to suppress heating demand across north-west Europe. Spot prices softened while forward contracts firmed modestly, reflecting a growing tension between relaxed near-term fundamentals and building geopolitical risk premia.
Natural gas prices eased at the front end, with the NBP day-ahead settling at 73.35p/therm, down nearly 2p on the day, as temperatures running more than 4°C above seasonal norms held UK system demand around 218 mcm/day – well below average for late February. The system opened long on Thursday morning by roughly 4 mcm, and benign conditions are now expected to extend into the first weekend of March. Norwegian total exit nominations stood at 317 mcm/day, but UK-bound flows via Langeled fell sharply to 47.50 mcm/day from 56.80 the prior session after Oseberg maintenance was brought forward a day. LNG send-out dipped marginally as Dragon terminal output eased, though South Hook held steady at 50.80 mcm/day, and a healthy pipeline of predominantly US-origin LNG cargoes into north-west Europe should keep the physical balance comfortable. Further along the curve, seasonal contracts firmed – NBP Sum-26 gained 0.72p to 73.84p/therm and Win-26 added 0.61p to 78.76p/therm – as traders priced ongoing concern over tight storage levels. EU storage slipped to 30.34%, tracking close to 2022 levels, though current trends suggest end-of-winter stocks could finish above 19% if milder conditions persist and withdrawals moderate as expected.
UK day-ahead baseload fell £7.84 to £69.53/MWh, with peak dropping £9.35 to £71.31/MWh, as mild weather trimmed demand and wind generation ran above seasonal norms. CCGT and nuclear provided the bulk of firm output, with interconnectors continuing to flow into the UK. Intraday system prices showed significant variation, with the maximum buy price reaching £131.58/MWh during the Wednesday evening peak. The forward power curve tracked gas higher, with Mar-26 baseload settling at £73.58/MWh and Win-26 at £74.10/MWh. The nuclear picture remains constrained – Hartlepool unit 2 has been offline since June 2025, Torness unit 2 is out on planned maintenance until April, and both Heysham 1 unit 2 and Heysham 2 unit 7 are on unplanned outages – limiting the downside for near-dated power, particularly if wind underperforms next week as models currently suggest. On the continent, French baseload was notably soft around €22.75/MWh on strong nuclear and hydro availability, while German and Dutch markets firmed alongside gas and carbon, supporting interconnector flows into France's neighbours and helping cap UK import costs.
In broader commodities, Brent crude edged higher to $70.85/bbl, supported by a renewed geopolitical risk premium as US–Iran tensions persist ahead of the latest round of nuclear talks in Geneva, with WTI at $65.42/bbl. Coal was little changed, with ARA CIF Cal-27 at $111.37/tonne. Carbon saw the most notable move in the complex – EUA Dec-26 surged €1.91 to €72.58/tonne, driven by positioning ahead of the Geneva talks and broader risk-on sentiment, while UK ETS Dec-26 rose more modestly to £45.87/tonne. The UKA–EUA spread remains wide, with UK carbon continuing to trade at a significant discount. Sterling strengthened against both the euro and the dollar, with GBP/EUR at 1.1476 and GBP/USD at 1.3556, tempering the sterling-denominated cost of imported commodities. Looking ahead, the key near-term risk is a forecast drop in wind output below seasonal norms through early March, which would increase reliance on gas-fired generation and could tighten prompt power margins, particularly given the constrained nuclear fleet.