Energy markets remain broadly stable, with gas and electricity prices trading within relatively narrow ranges this week. After a softer start, both gas and power contracts recovered and have since moved sideways, reflecting balanced market conditions.

Fundamentals remain largely unchanged:

• UK gas demand remains below seasonal norms due to mild weather.
• LNG supply into Europe continues at strong levels.
• European storage withdrawals have slowed.
• Carbon prices have eased, reducing cost pressure on generation.
• Geopolitical risks, particularly US–Iran tensions, continue to provide underlying market support.

Overall, the market remains balanced, with weather and geopolitical developments acting as the primary short-term drivers.

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Gas Market

Current Position

The UK gas system is currently slightly oversupplied, with demand running significantly below seasonal averages due to milder temperatures.

Front-month gas (March 2026) is trading in the mid-to-high 70p per therm range. The forward pricing structure remains typical:

• Summer 2026: Mid-70s p/th
• Winter 2026: Around 80p/th
• Calendar 2027: High-60s p/th range

Despite comfortable short-term fundamentals, pricing remains sensitive to weather changes and geopolitical developments.

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LNG & Supply

Liquefied Natural Gas (LNG) imports into North West Europe remain strong, with the United States continuing to dominate export volumes. February arrivals are tracking ahead of last year’s levels, helping maintain supply security across the region.

Global LNG prices remain stable, with limited demand pressure from Asia. This strong supply position continues to limit the risk of significant short-term price spikes.

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European Storage

European gas storage levels remain above 30% capacity. Although lower than this time last year, the pace of withdrawals has slowed.

A key risk factor into March is weather. Meteorological models suggest the potential for a Sudden Stratospheric Warming (SSW) event in mid-March, which could trigger a late-season cold spell across North West Europe.

A colder March would likely:

• Increase gas demand
• Slow storage injections
• Support Summer and Winter 2026 pricing

At present, however, mild temperatures continue to suppress demand.

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Norwegian Supply

Norwegian gas flows remain steady, though planned maintenance at key facilities is scheduled from April onwards. Seasonal maintenance typically begins in mid-April and can reduce export volumes during Q2.

If LNG flows were to tighten, this could provide support for Summer 2026 contracts.

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Power Market

Electricity markets have mirrored gas movements this week, opening softer before recovering and trading within a stable range.

Front-month UK baseload power (March 2026) is currently trading in the low-to-mid £70/MWh range. Forward levels remain:

• Q2 2026: Approximately £69/MWh
• Winter 2026: Around £75/MWh
• Calendar 2027: High-£60s/MWh

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Generation & Renewables

Wind generation remains volatile across the UK and Europe:

• UK wind is currently contributing close to one-third of total generation.
• France continues to rely heavily on nuclear output, although availability remains below historical norms.
• Germany remains more dependent on gas and lignite generation.

Lower-than-seasonal wind forecasts across parts of Europe over the coming weeks could increase gas-for-power demand and support day-ahead electricity pricing.

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Carbon & Wider Energy Markets

Carbon prices have declined recently, reducing the cost of thermal power generation. Oil prices remain stable in the low-$70 per barrel range, while coal prices are also steady.

Currency markets remain stable, creating limited impact on forward procurement pricing. At present, there are no significant drivers from the wider commodity complex.

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Geopolitical Backdrop

Tensions between the United States and Iran remain unresolved. While diplomatic discussions continue, ongoing rhetoric from both sides maintains underlying market sensitivity.

Currently, geopolitical factors are providing background price support rather than acting as a direct market driver, but they remain an important risk factor to monitor.

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Market Outlook

Short Term (Next 2–4 Weeks)

• Mild weather continues to suppress demand.
• LNG supply remains strong.
• Storage levels are stable.
• Potential cold risk in March remains.

Overall outlook: Neutral, with slight support from geopolitical risk.

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Summer 2026

• Norwegian maintenance may tighten supply.
• Storage refill pace will be key.
• LNG availability remains critical.

Overall outlook: Stable but sensitive to weather and supply changes.

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Winter 2026

• Dependent on storage starting levels.
• Influenced by global LNG competition.
• Impacted by carbon pricing and geopolitical developments.

The Winter premium remains intact.

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Procurement Considerations for Businesses

For commercial energy users:

• Forward prices remain significantly lower than peak levels seen during 2022–2023.
• Markets are currently rangebound but sensitive to major headlines.
• Short-term volatility continues to present structured buying opportunities.

A phased or layered procurement strategy remains a prudent approach under current market conditions.

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For further market insight or guidance on your energy procurement strategy, contact the Enexus Energy team for expert support.