volatility remains despite gas and power markets falling overall

Further out on the curve, contracts remain relatively volatile but overall have come down in February despite the latter part of the month experiencing fresh concerns around supply and geopolitical risks amid the ongoing conflict in Ukraine. Winter and Summer markets in 2025 have overall came down for both gas and power, as revisions to storage targets over the summer eased some concerns around hitting targets, with storage levels being at yearly lows for this time of the year.

As peace deals in both the Middle East and Ukraine lingered, the outlook for much of February was relatively bearish, but a clash at the White House between Zelensky and Trump, threw current negotiations into doubt. As the U.S is a key energy provider especially around gas supplies, Europe will be keen on Trump continuing to support Ukraine in an attempt to bring the war to an end. On the wider commodity complex, oil markets also faired bearishly as Trumps new tariff policies for neighbouring countries and the likes of China threw some doubt into the overall demand outlook. Brent-Crude therefore saw losses just under 5% for February. 

Market Outlook

The overall supply picture remains steady for the time-being and there are no material short-term risks as the winter draws to an end. This in turn will ease any bullishness amid temperature adjustments during March, but the overall outlook will stay cautious due to the wider complexities concerning Russia/Ukraine and the Middle East conflict. As negotiations around peace deals persist, the longer they linger, the likely hood of upside pressure in contracts is likely to occur especially across prompt markets, which is likely to keep markets relatively volatile for the time-being. With no immediate concerns around Norwegian gas flows and LNG imports, we are likely to see the supplies fundamentals and geopolitical risks offset one another for the remainder of the winter period at least.