The February 2026 Energy Market update saw energy markets driven by low gas storage levels, shifting LNG flows, falling carbon prices, improving renewable capacity, and continued geopolitical uncertainty, as Europe moved through the latter half of winter with heightened sensitivity to weather and global supply dynamics.
Week of 2nd February 2026
European gas storage fell to around 41%, pushing the Dutch TTF benchmark to a ten-month high near €42.60/MWh as faster withdrawals tightened the winter supply picture. Despite easing Middle East tensions and stable LNG flows from the U.S. and Qatar, low inventories and rising LNG import needs kept markets weather-sensitive. Analysts noted that while severe cold could leave storage near 11% by end-March, blackout risks remain limited, though summer refill pressure may support forward prices.
Week of 9th February 2026
Short- and long-term gas and power prices eased, with forward contracts for 2027–2029 returning to levels rarely seen since 2022. Weak U.S. gas prices, potential increases in EU carbon permit supply, and slow electricity demand recovery weighed on markets. However, low European storage (37%), ongoing Russia–Ukraine tensions, and stronger Asian manufacturing maintained volatility. Analysts highlighted that longer-term contracts may offer value, particularly for gas, while electricity savings are partly offset by rising non-energy costs.
Week of 16th February 2026
Prices fell further across 2026–2029 contracts, with electricity declining faster than gas due to lower EU and UK carbon allowance costs. Expanding global LNG supply and record UK solar capacity supported a softer long-term outlook. However, risks remain from potential disruptions to Russian LNG flows, rising U.S. domestic gas prices driven by record LNG exports, and European storage nearing historic lows. Buyers were advised to consider longer-term contracts to hedge against future supply-driven price increases.
Week of 23rd February 2026
European gas prices extended losses as mild weather, steady Norwegian pipeline flows, and stronger LNG arrivals eased immediate supply concerns. Carbon prices weakened further, and long-term decarbonisation plans across Europe added to bearish sentiment. Nonetheless, limited progress in Russia–Ukraine peace talks and renewed U.S.–Iran tensions kept geopolitical risk premiums elevated. Short-term contracts remain more exposed to winter volatility, while longer-dated contracts continue to offer comparatively better value.
Conclusion
While near-term volatility persists due to storage levels, weather shifts, and geopolitical uncertainty, forward prices remain significantly lower beyond 2026. Longer-term contracts—particularly for gas—may provide budget certainty and potential savings, though electricity benefits are moderated by rising non-energy costs. Reviewing options now allows buyers to balance price security with flexibility in a still-fragile market.
For further insights and information on the dynamic landscape of the 2026 energy market, feel free to contact us:
01738474630
theteam@herestheplan.co.uk
