15 January 2026

Weekly Energy Market Update 

Outlook

The combination of colder-than-average temperature forecasts, low wind generation levels after the weekend, and ongoing geopolitical concerns (set against already low European gas storage levels) has pushed short-term power prices to a one-year high. In Germany, the last week of January is currently trading at €145.00/MWh, while in the UK the February contract is up more than 20% week-on-week, at £98.50/MWh. As in recent weeks, however, long-dated gas contracts are trading slightly lower. The market remains confident that storage facilities will be comfortably refilled and that the global gas market will move into oversupply as global LNG output continues to increase. We share this view and expect the current price rally to extend in the near term, before giving way to a renewed downtrend as milder temperatures set in, Golden Pass confirms its start date, and rising solar generation exerts its usual downward pressure on prices. 



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Gas_Power

General Context
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The UK economy grew by a stronger-than-expected 0.3% in November, rebounding from the previous month’s contraction, driven by gains in the services sector and a recovery in manufacturing. 

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Germany recorded modest growth of 0.2% in 2025, marking its first expansion in three years after an extended period of stagnation. 

Oil

 

The front-month Brent contract rose to a three-month high this week, supported by concerns over potential US military action against Iran and the associated risk of supply disruptions.  

According to the EIA, global oil prices are expected to decline in 2026, with Brent crude forecast to average around $56 in 2026 and $54 in 2027, down from $69 in 2025, as global production continues to outpace demand. 

 

 
Oil

Gas & Power
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European gas storage facilities are currently 52.5% full, down 5.5 percentage points week-on-week despite steady LNG imports. The arrival of a third cold wave after the weekend, expected to be particularly severe in Eastern Europe (with Hungary and Romania likely to experience temperatures 6–7°C below seasonal norms), is raising concerns, leading to a sharp increase in gas and power prices for February and March. 

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According to a draft text seen by the FT, the EU wants any future UK government to pay significant compensation if it withdraws from a post-Brexit reset deal, including a proposed veterinary agreement to reduce food trade red tape. The veterinary deal is central to Keir Starmer’s broader EU reset, alongside plans to re-link UK and EU carbon pricing schemes. 

Carbon

 

EU carbon prices have continued to climb to levels unseen since October 23. The December 26 contract is currently trading at €93.50/tonne, supported by broader bullish momentum across the energy complex as well as a significant increase in long positions held by financial players. On the UK side, prices have risen even faster, with a week-on-week increase of 10%, mainly driven by the imminent start of EU–UK talks on re-linking the two schemes. 

Current Prices
Market 08/01/26 15/01/26 Change
Brent (March) $60.75

$64.25

 ^
UK Allowances (December 26) £68.00 £74.50 ^
UK Gas (NBP): February 26 71.25p 86.50p ^
UK Gas (NBP): Summer 26 63.50p 67.25p ^
UK Gas (NBP): Winter 26 68.75p 70.25p ^
UK Power: February 26 £81.00 £98.50 ^
UK Power: Summer 26 £69.50 £73.50 ^
UK Power: Winter 26 £76.00 £78.75 ^

UK Gas (NBP) - Rolling 12-Month Average
Screenshot 2026-01-15 at 14.06.12

Sustainability Spotlight

 

Record-breaking offshore wind capacity secured in UK auction.

The UK's latest auction round for offshore wind projects, known as Contracts for Difference (CfD) AR7, secured a record 8.4GW of offshore wind capacity. The contracts secured through AR7 are expected to generate enough renewable electricity to supply the equivalent of 12 million homes and includes the first phase of Berwick Bank in the North Sea; the largest planned offshore wind farm worldwide.

This largest-ever single procurement of offshore wind energy in Europe is a crucial step to progress towards the governments '2030 Clean Power' target.

 
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Talk to our experts

 

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