Energy Market Update - 30 January 2026
European gas and power prices pushed higher again as colder weather forecasts and rapidly falling storage projections kept risk premia elevated, while carbon eased on profit-taking and oil strengthened on renewed US-Iran tensions.
Natural gas prices firmed on the prompt and along the curve, with UK NBP front-month settling back above 100p/therm (its strongest close since early November) as the market fixated on tight late-winter balances. Aggregate EU storage stood at 43% on 28 January, and analysts now warn stocks could drop to roughly 14% by end-February, which would be a record low if realised. Supply indicators were steady but not loose: Norwegian nominations were around 342 mcm/day and UK LNG send-out eased to 77 mcm/day after stronger flows earlier in the week. Further out, March and April led gains as traders rolled ahead of February expiry, while growing discussion of a sudden stratospheric warming event shifted cold-risk towards late February and early March, supporting near-dated months. Summer-26 also reached its highest level of the year on expectations that refill economics will remain difficult after the early-season storage draw. Strength in US Henry Hub (with February settling at a multi-decade high) added support to Atlantic LNG pricing and reinforced competition between European buyers and US domestic demand.
UK power markets tracked gas higher across the curve, although day-ahead values softened slightly as wind generation recovered from around 7 GW to nearly 13 GW. Despite stronger wind, gas-for-power demand stayed supported by lower imports from the Continent and a rise in GB system demand from roughly 37 GW to almost 40 GW. January wind output is now on course to average more than 14 GW, the strongest January in four years, helping cap prompt power prices even as gas costs climbed. Seasonal contracts posted solid gains, with Summer-26 baseload up about £1.50/MWh and Winter-26 up about £1.70/MWh, reflecting fuel pass-through, while weaker carbon prices limited the upside. In France, EDF’s revised nuclear maintenance plan - moving planned work from Q3-26 into Q4-26 - lent support to back-dated French prices and filtered into cross-Channel sentiment.
In other commodities, oil rallied as geopolitical risk returned to the foreground, with Tehran warning of swift retaliation if Washington escalates action over the nuclear dossier. Brent traded up to around $72/bbl intraday before settling near $70.71/bbl, with relatively flat time spreads signalling no obvious physical tightness even as headline risk kept positions supported. Carbon moved the other way: the EUA Dec-26 benchmark fell by roughly 3% to €83.98/tonne (its lowest in ten days) amid profit-taking after recent gains, and UK ETS Dec-26 eased to £65.13/tonne; near-term direction remains linked to residual load and auction supply, though policy themes (including potential UKA–EUA linkage discussions) continue to shape the medium-term backdrop. Beyond immediate pricing, the market also monitored talk of tighter EU measures on Russian oil, Canada’s push to expand LNG exports (including interest in India), indications of rising Chinese LNG imports, and a potentially tight early-February power picture in Germany if wind patterns remain unfavourable.