January 2026 UK Energy Market Trends: Gas, Power & Oil
January 2026: Gas Prices Jump Back Above 80p — Winter Demand Bites Back
January started quietly with gas at 68.22p and power at £73.01, but prices climbed steadily throughout the month. Gas jumped 22.6% to finish at 83.67p, while power rose 10.1% to £80.40. The biggest moves came mid-month when colder weather forecasts and geopolitical concerns pushed both fuels higher. By month-end, gas had broken back above the 80p mark for the first time since last winter.
⛽ GAS
⚡ POWER
📊 Week-by-Week Breakdown
The month opened with prices drifting lower as milder weather forecasts reduced heating demand. Gas dropped from 68.22p to 66.70p while power eased from £73.01 to £72.12. Higher renewable output and improved wind forecasts kept the pressure on, with traders taking profits after December's run-up.
The calm didn't last long. Despite continued warm weather keeping a lid on prices early in the week, rising oil prices and ongoing geopolitical tensions started to support the market. Gas recovered from its low of 64.52p on 6 January, climbing back towards pre-Christmas levels.
This was the week that changed everything. On 16 January, colder weather forecasts and renewed market confidence drove the biggest single-day jump of the month - gas up 12.8% and power up 7.0%. Gas smashed through the 75p barrier and kept climbing, reaching 80.03p by Friday as demand forecasts strengthened.
After the previous week's surge, prices took a breather and moved sideways around the 78-80p level for gas. Some profit-taking kept gains in check, but the underlying mood remained positive as supply concerns balanced against demand expectations.
The month ended with a bang as both gas and power posted strong gains on the final trading day. Gas jumped 5.6% to 83.67p while power climbed 3.3% to £80.40, setting the tone for February with prices back at multi-month highs.
The Month's Story
What January Taught Us
The biggest lesson from January was how quickly market mood can change. Gas was trading at 64.52p on 6 January, then jumped 30% over the following three weeks to finish above 83p.
The 16 January price surge (+12.8% for gas, +7.0% for power) came entirely from colder weather forecasts increasing heating demand. Even in a mild winter, temperature predictions matter enormously.
Gas breaking back above 80p in the final week signals that winter pricing isn't over yet. This level has acted as key resistance and support throughout the past year.
Power rose 10.1% for the month compared to gas's 22.6%, showing how electricity prices remain tied to gas movements even with higher renewable output helping to cap gains.
January Price Summary
❄️ Winter vs Spring — The Seasonal Reality
The seasonal gap has widened significantly during January's price rises. February contracts are priced at a 23% premium to spring gas and 28.5% premium for power. Businesses with flexible renewal dates should seriously consider waiting for spring pricing if possible.
📈 January's Volatility in Context
Should I Lock My Renewal Now?
With gas now at 83.67p and rising, you need to move fast. February renewals are pricing around 102p for gas - expensive but potentially getting worse. Get quotes this week and consider locking if you can't wait for spring pricing.
March contracts are pricing around 94p for gas - still expensive but better than February. You have a bit more time to watch the market, but prices are trending upward. Start the quote process now.
Spring renewals look much better value at 78.98p for gas and £77.01 for power. If your current rates are above 80p gas or £80 power, you should lock these levels. The seasonal discount is substantial.
Forward prices for summer 2026 and beyond remain reasonable, but January's price action shows how quickly things can change. Keep watching the market but no urgent action needed yet.
📅 January's Key Events
Gas Back Above 80p - Time to Lock Spring Rates?
Gas: 83.67p · Power: £80.40 — but spring contracts available from 78.98p
We compare 28+ suppliers to find you the best deal — no pressure, no obligation.
Get Your Free Quote →⭐ 100% five-star reviews on Trustpilot · Independent broker since 2014
👀 What to Watch in February 2026
February will be crucial as we head into the final stretch of winter. Weather forecasts will drive short-term moves, while ongoing geopolitical tensions could support prices. The key question is whether gas can hold above 80p or if milder spring weather will start pulling prices back down. Watch for any supply disruptions and keep an eye on storage levels as we move through the coldest part of the year.
⭐ Join the Market Updates
