UK Gas Extends Losses as Mild Weather and Strong LNG Keep System Long

Gas Market

NBP gas futures fell on Monday, extending last week’s bearish momentum as the system ran with a strong surplus. The British grid was oversupplied by 25.7 million cubic metres (mcm) per day, and the loose balance fed through to the curve: the front month dropped 37p to 80.78p/therm, while Summer-26 settled at 74.51p/therm, down 0.57p. The day-ahead declined 5.25p to 70.65p/therm as mild weather and better-than-expected wind generation reduced gas-for-power demand and pressured prompt prices. European storage stands at 82.55% full versus 93.53% this time last year, though the gap has narrowed by 1.34 percentage points over the past week amid the milder spell.

Power Market

GB baseload futures were mixed as a soft NBP curve, underpinned by strong LNG arrivals and above-average temperatures, weighed on sentiment. Near-curve prices were broadly flat, with the front month up a marginal £0.15 to £80.93/MWh, while the rest of the curve saw only modest moves. On the prompt, stronger wind output and comfortable gas supply pulled prices lower as the day-ahead fell 13.14% to £74.70/MWh, tracking the gas prompt down. Carbon prices firmed. UKA 2025 rose £1.47, or 2.6%, to £57.15/tonne, lending some support to power further out the curve. EUAs hovered around the €80 threshold for most of the session as the market struggled to break lower despite weakness across broader energy benchmarks; Dec-25 finished €0.58 up at €80.16/tonne.

Oil Market

Crude edged higher as the market weighed fresh disruption risks against lingering surplus forecasts. Front-month Brent rose 43c, 0.7%, to $64.06/bbl with fuel futures leading oil complex gains, with U.S. gasoline up just over 1% and diesel close to 1%, supported by a run of U.S. refinery issues and Ukrainian drone strikes on Russian plants. Lukoil’s Volgograd refinery remains shut after it was struck by Ukrainian drones last Thursday, and the company has declared force majeure at Iraq’s West Qurna-2 oilfield as new Western sanctions requiring counterparties to cease business with Lukoil from 21 November hamper operations. Gains were capped by expectations of an impending supply surplus, with higher OPEC+ output and record U.S. production seen outpacing demand in the months ahead.

Markets this morning

NBP forward gains are muted this morning, but the prompt is livelier. Near curve NBP forward contracts are up an average of 0.2p/therm while the day-ahead is down 3.60p at 67.05p/therm as mild weather and steady wind continue to pressure prices. Norwegian flows via Langeled are 5 mcm/d higher at 72 mcm/d with Kvitebjørn production back online. Brent front month is up 18c at $64.24/bbl as investors weigh the fallout from U.S. sanctions on Russia and the implications for both crude and refined products.