The increasing likelihood of no Russian gas flows via Ukraine from January 1st supported the NBP curve on Tuesday.

 Gas Market A forecasted decline in temperatures for the coming days supported NBP prompt contracts on Tuesday, with the Day ahead contract increasing by 4.48p day-on-day to close at 121.95p per therm. The influence of the expected drop in temperatures filtered into the near curve, while the increasing likelihood of no Russian flows via Ukraine come January 1st provided the lions share of the upside. Low liquidity provided further upward support also. Near months averaged an increase of 2.24p day-on-day, with February-25 posting a gain of 2.14p to settle at 121.96p per therm. The Q2-25 contract ended the day at 118.32p per therm, up 2.42p day-on-day. A total of 112 LNG cargoes arrived into the UK throughout 2024, a 45.0% year-on-year decline.  

Power Market

The gains exhibited on the NBP gas curve on Tuesday were reflected across the GB Baseload near months. The January-25 contract expired at £109.20/MWh, a gain of £3.75/MWh on its previous close. Near curve gains averaged £2.55/MWh day-on-day, while the Q2-25 contract increased by £1.85/MWh. Below average temperatures, coupled with a downward revision in wind output pushed up the Day ahead contract, which increased by 11.8% day-on-day to close at £57.02/MWh. Wind output for the rest of the week is set to average above normal which could dampen further short-term gains.  

Oil Market

Crude oil prices posted modest gains on the last day of the year, with the front month Brent contract closing at $74.64 a barrel, up just 25 cents on its previous settlement. In comparison to its close on the same day in 2023, Brent is down 3.1%, largely due to China’s struggling economy and subsequent muted oil demand, while the U.S. and other non-OPEC producers ensured the global market remained well-supplied throughout the year. The IEA sees the market entering 2025 in surplus, even after OPEC and its allies delayed their plan to start raising output until April 2025 against a backdrop of falling prices. The front month WTI contract rose by 73 cents day-on-day to close at $71.72 a barrel.    

Markets this morning

It’s a cold start to the new year, with temperatures forecasted 5 degrees below average for the coming days. Wind power generation is also expected to fall back from the past days’ stormy levels, which will contribute to higher demand from the power sector. Trade across the prompt market is yet to get going, while trade across the NBP curve is more mixed. The front month contract last transacted at 122.60p per therm, up 0.64p on its previous close, while the Summer-25 is down 29 cents day-on-day, having last traded at 116.70p per therm. Oil prices continue their upward trend, supported by a renewed sense of optimism regarding China’s economy.