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.