Market Drivers January 2026
Bearish Drivers
· Stable Norwegian pipeline exports into the UK and NWE
· Strong LNG arrivals helped offset higher demand
· Periods of milder weather forecasts briefly capped price rallies
· Adequate system flexibility prevented extreme short-term tightness
Bullish Drivers
· Colder-than-average weather increased heating demand and accelerated storage withdrawals
· Low wind generation raised gas-for-power demand
· Below-normal European storage levels heightened scarcity concerns
· Investment fund short-covering amplified upward price moves
· Geopolitical risks supported risk premiums across European gas markets
So far in the first month of 2026, the gas market moved from largely sideways trading into a sharp mid-month rally. Colder-than-average weather increased heating demand and accelerated storage withdrawals, while lower wind generation, fund short-covering, and wider European supply concerns added further support. Although Norwegian pipeline flows and LNG arrivals helped limit the upside, tightening storage levels and heightened geopolitical and weather risks drove increased volatility, leaving prices around 12–13% higher than December levels by late January.
Looking ahead to February, early weather forecasts suggest the UK will remain colder than average, although less severe than January. Total North West Europe gas demand is expected to remain strong at around 7,899 GWh/day, roughly 380 GWh/day lower month-on-month. Norwegian pipeline exports are forecast to remain broadly stable, while LNG arrivals are expected to increase to a record high. This is driven by global export growth and strong European price premiums, making Europe an attractive destination for LNG. As a result, storage withdrawals should fall by about 1,300 GWh/day month-on-month to around 3,150 GWh/day.
Despite this, total NWE storage levels are projected to drop to 108 TWh (19% full) by the end of February. This is significantly lower than previous forecasts of 141 TWh (25%) and would mark the lowest end-of-February level on record. The current record low is 116 TWh, set in 2018 during the “Beast from the East,” when severe cold caused sharp storage drawdowns. If these conditions persist, we expect February spot prices to trade broadly in line with recent forward-month levels.
The market is likely to remain cautious throughout the month, as participants try to manage a fragile balance and avoid severe storage depletion ahead of summer. The summer outlook remains comfortable, with storage expected to fully refill between August and October, depending on the scenario.
There are, however, risks around this baseline. A much warmer February could ease demand and push prices lower. On the other hand, stronger competition from Asian buyers for uncommitted LNG cargoes, or any supply disruption in this already tight market, could push prices higher again—potentially toward €40/MWh for TTF and 100p/th for NBP.
Weekly Market View – w/c 12th January, 2026
Weekly Market View – w/c 5th January, 2026
Market Drivers December 2025
Bearish Drivers
· Mild weather reducing heating demand and gas burn
· Strong LNG inflows and stable Norwegian pipeline supply
· High wind and renewable generation displacing gas-fired power
· Comfortable system margins and lack of major outages
· Softer forward curve sentiment and low market volatility
Bullish Drivers
· Colder-than-normal winter weather increasing heating and gas-for-power demand
· Lower European gas storage vs historical averages increasing winter risk premium
· LNG competition from Asia or shipping disruptions tightening supply
· Norwegian or domestic supply outages
· Higher carbon prices raising gas-fired power generation costs
· Power market sensitivity to gas as marginal fuel (strong gas–power linkage)
Both gas day ahead and electricity traded bearishly in December, falling 8–11% from November averages. This reversal was driven by weather dynamics with December ultimately turning out much warmer compared to forecasts, putting downward pressure on prices.
For January, the weather is forecast to be cold for the first half of the month, with temperatures below seasonal norms, followed by near-normal conditions in the second half. This lifts total demand by around 1,345 GWh/d month-on-month to about 8,200 GWh/d, with higher consumption in Italy and the UK driving an additional 144 GWh/d of net exports from Northwest Europe.
NWE storage levels are now expected to end January at around 181 TWh (32% full), slightly below the earlier 200 TWh forecast and well under the 47% level seen a year ago, reflecting a strong start to the month. Net withdrawals are projected to rise by about 1,500 GWh/d to 4,283 GWh/d, driven mainly by higher residential and industrial demand, while LNG sendout and Norwegian imports are expected to remain broadly flat at a combined 4,471 GWh/d. Looking ahead, end-winter storage outcomes range from 24% in the central case to 13% in a cold scenario and 37% in a mild one. Regardless of the winter outcome, the summer 2026 outlook remains bearish, with storages expected to refill fully by late summer or early autumn, keeping downward pressure on prices, potentially below €26/MWh.