Energy Market Analysis – 19/01/2026
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Power
UK baseload power prices surged across spot and curve markets, tracking the upward momentum in gas prices. Spot and prompt contracts lifted particularly strongly, though further-dated contracts showed more mixed movements. The bullishness was attributed to multiple factors: varying wind forecasts in Northwest Europe, colder weather outlooks, and declining wind generation expectations. Wind speeds peaked early in the period but were forecast to ease significantly, remaining below seasonal averages through the end of January.
The latest EC 46-day outlook indicated slightly warmer temperatures over the initial five days before turning notably cooler for the remainder of January and through February. The cooler forecasts and reduced renewable generation capacity meant increased reliance on gas-fired power generation. Front-month and seasonal contracts saw particular gains, whilst liquidity remained limited at times throughout the week. Oil prices eased towards the period’s end as concerns faded regarding potential U.S. strikes on Iran following anti-government protests, though this had limited immediate impact on power market fundamentals.
Gas
UK gas prices rose through the curve during the period, driven by geopolitical tensions and supply concerns. The U.S. considered military and cyber responses against Iran, heightening risks to LNG supply routes, whilst American drilling activity declined as demand eased. Norwegian total exit nominations remained relatively stable around 337–341 mcm/day, though flows to the UK varied between 102–115 mcm/day. Nyhamna’s partial outage continued until 15th January, with additional planned outages at Aasta Hansteed and Dvalin scheduled for 21st January, impacting combined flows by 15 mcm/day. LNG send-out fluctuated between 82–99 mcm/day, remaining robust with 10–13 cargoes inbound over two weeks.
Asian spot LNG prices retreated due to sluggish consumption, making more cargoes available for Europe. European storage levels stood at 51.87–53.17%, approximately 12.5% lower year-on-year, with strong withdrawals continuing. Some analysts projected levels could fall below 30% by season’s end. Weather forecasts indicated temperatures would drop significantly below seasonal norms through January and February, whilst wind generation was expected to fall considerably below average from mid-month onwards, potentially increasing gas-for-power demand.