Energy Market Report – 27 February 2026
Gas and power markets swung between weather-driven softness and geopolitical firmness this week, as US-Iran nuclear talks broke down without a deal and mild temperatures kept physical balances loose. Prompt prices rebounded sharply into Thursday; forward curves firmed modestly as traders weighed soft near-term fundamentals against rising medium-term risk.
Natural gas prices traded within a narrow range through mid-week before the collapse of the Geneva talks jolted the market higher. Northwest Europe remained unusually mild - more than 4°C above seasonal norms - with UK gas demand easing to around 218 mcm/day and the system opening long again on Thursday. NBP day-ahead settled at 73.35p/therm on 25 February, down nearly 2p on the session, before the front-month Apr-26 contract surged to around 77p/therm by Thursday morning as the no-deal headlines hit screens. TTF equivalent moved to approximately €31.40/MWh. On supply, an unplanned outage at Norway's Oseberg field was resolved, but brought-forward maintenance contributed to Langeled flows falling by roughly 9 mcm/day, with total Norwegian exit nominations dropping to 317 mcm/day. LNG send-out eased as Dragon terminal output fell by about 4 mcm/day, though South Hook held above 50 mcm/day and a healthy schedule of northwest European arrivals continues into early March from the US, Senegal, Nigeria, Thailand, and Russia. EU storage slipped to 30.3% full as of 24 February - current draw rates suggest an end-of-winter level above 19%, leaving a manageable but not trivial refilling task for summer. The latest AIFS model run has flagged a spell of below-seasonal temperatures from around 7 March for the UK, which, if verified, would lift demand and accelerate the tail-end of storage withdrawals.
UK power tracked gas lower on the prompt during Wednesday's session before recovering into Thursday. Day-ahead baseload settled at £69.53/MWh, down nearly £8 on the day, as mild conditions and rising wind output - projected at roughly 18 GWh/h - depressed residual demand. However, wind is forecast to fall back towards 11 GWh/h today, and gas-for-power demand has already risen sharply, up 22 mcm/day on the day-ahead. UK Mar-26 baseload was trading around £73.60/MWh this morning. The baseload curve posted modest gains through Wednesday, with Sum-26 base offered near £68-69/MWh and Win-26 around £75/MWh, reflecting strength in oil and carbon and the persistently uncertain geopolitical backdrop. Nuclear availability continues to weigh on the supply stack - Hartlepool 2 has been out on an unplanned outage since June 2025, Heysham 2 unit 7 tripped in mid-February and remains offline, and Torness 2 is on a planned shutdown through early April. A further full 610 MW planned outage at Heysham 1-1 begins on 2 March, compounding existing constraints and maintaining structural support for CCGT margins and thermal spark spreads. Interconnector flows remained stable, with IFA importing and BritNed modest.
In broader commodities, Brent crude edged to $70.85/bbl on Wednesday's settlement before nudging above $71/bbl on Thursday as the Iran no-deal outcome introduced fresh risk premium, though both Brent and WTI remain down 1-2% on the week, reflecting underlying physical comfort. Carbon certificates diverged - EUA Dec-26 fell about 2.2% to roughly €71/tonne as political uncertainty weighed, with Germany and others calling for a review of emissions scheme viability, while UK ETS Dec-26 settled marginally higher at £45.87/tonne. Coal prices firmed, with ARA CIF Cal-27 rising around 2% to approximately $114/tonne. Sterling strengthened against both the euro and the dollar, with GBP/EUR at 1.1476 and GBP/USD at 1.3556, providing a modest tailwind for sterling-denominated import costs. Looking ahead, the market will be closely watching for signals from the US administration on Iran, the evolution of weather models into early March, and the pace of EU storage draws as the refilling season approaches.