Oliver Mellman

27th January 2026, gas and power markets remain finely balanced as LNG flows and geopolitics keep traders on edge. UK gas prices were softer by the close of yesterday’s session, with NBP day-ahead settling around 101 p/therm as milder short-term weather and lower demand weighed on the prompt. UK gas demand is forecast near 275 mcm/day, around 9% lower day on day and well below the seasonal norm, helping to ease immediate system pressure. Storage across Europe remains comfortable at roughly 45% full, while UK supply fundamentals continue to look robust, supported by steady Norwegian flows and consistent LNG arrivals. That said, there are still enough risk factors to prevent any real complacency. Unplanned maintenance at Norway’s Asgard field continues, although total Norwegian output remains healthy. More importantly, US LNG feedgas deliveries dropped sharply over the weekend due to freezing conditions and stronger domestic demand, raising questions over export availability into February. This is already feeding into market sentiment, particularly further along the curve, where prices remain sensitive to any perceived tightening in global LNG balances. On the power side, UK day-ahead baseload settled higher at around £96/MWh, tracking movements in gas and reacting to changing supply dynamics. Wind generation is providing some relief, with UK output forecast to reach around 19 GW today and load factors well above seasonal averages. Strong renewable output continues to cap upside on prompt power prices, although nuclear outages and the ever-present reliance on gas-fired generation mean volatility has not gone away. Geopolitics also remains firmly in focus. The EU has now approved a binding plan to phase out all Russian gas and LNG imports by late 2027, a landmark decision for European energy security. While broadly supported, opposition from Hungary and Slovakia highlights that implementation risks remain. At the same time, rising tensions in the Middle East and reports of increased US naval presence near the Persian Gulf are being closely monitored, given the potential implications for LNG flows through the Strait of Hormuz. Looking ahead, the near-term outlook points to a looser UK gas system, with a dozen LNG cargoes due by early February and the NBP–TTF day-ahead discount widening. However, with weather risk, LNG uncertainty and geopolitics all in play, markets remain reactive rather than settled. For businesses, this continues to underline the value of flexibility, risk management and not relying on a single narrative in what is still a fast-moving energy landscape.

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LNG buyers are increasingly focusing on flexibility to capture opportunities and optimise supply. With new production coming from the U.S. and Qatar, the market is becoming more balanced, and buyers are exploring diverse supply sources and flexible contract terms. McKinsey’s 2025 LNG Buyers’ Survey shows that those who adapt to these evolving priorities can position themselves for growth and stronger partnerships with suppliers. See here: https://lnkd.in/dz7XwURY

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Rapidan’s Director of Global Gas Alex Munton spoke with Benjamin Storrow of E&E News about the longer-term market implications of the current disruption of Middle East LNG. He says: If you stack up the disruption in terms of what’s been cut off from the Gulf with bottlenecks on Hormuz on top of the structural decrease in Russian supply post-2022, the volumes are staggering”… “markets now if they weren’t thinking already, have to think about how LNG fits into their energy mix from a security of supply standpoint.” https://lnkd.in/gdtJ9i8g #LNG #EnergySecurity #GlobalGas #Geopolitics #EnergyMarkets #StraitOfHormuz #Iran

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🌍 The UK is on track to exceed its goal of 10 GW of low-carbon hydrogen production capacity by 2030, thanks to a diverse pipeline of over 100 projects and strong government support. Together with my colleagues Conrad Purcell, Kayley Rousell and Zainab Al-Qaimi, we explore the evolving hydrogen landscape in the UK in our latest article for Global Hydrogen Review. 📘 Click the link in the comments to learn how the UK is shaping its hydrogen future and what it means for industrial decarbonisation, energy security and sustainability.

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