An easing of geopolitical and winter supply risk weighed on the NBP gas curve on Friday

Gas Market

After showing signs of a modest recovery on Friday morning, the NBP curve retreated back into negative territory before the close. As risk premium related to the Russia-Ukraine conflict continued to dissipate as talks continued to progress, the near months shed an average of 5.7%, or 4.48p per therm, week-on-week. A growing level of comfort in terms of supplies for the rest of the winter period also fed into the downside, with the front month contract shedding 1.18p to settle at 75.29p per therm. The prompt market also edged down due to forecasts of above-average temperatures for the coming days. The Day ahead contract fell by 0.20p to close out the week at 74.30p per therm, while the Within day contract posted a 0.45p day-on-day loss to settle at 74.80p per therm.

Power Market

Risk of colder and less windy conditions in the early part of December lifted the front month GB Baseload contract on Friday. On its final day before it expired, December 25 rose by £0.98/MWh day-on-day to settle at £80.15/MWh. Further out, the Winter 26 contract sought direction from weakness on the NBP curve, falling by £0.08/MWh to close at £76.18/MWh. The prompt market made moderate gains, supported by indications of colder temperatures and low wind levels in north-western Europe. European carbon prices surged to fresh 9-month highs on Friday due to a surge in buying activity. Dec 25 European Allowances gained €0.98 day-on-day to close out the week at €83.08 a tonne.

Oil Market

Crude oil prices were stable on Friday, with all eyes focused on the continuing Russia-Ukraine peace talks, as well as Sunday’s OPEC+ meeting. It was expected that the meeting of the Organization of the Petroleum Exporting Countries and its allies would yield clues around potential oil output changes coming in 2026. The front month Brent contract shed just fourteen cents day-on-day to close out the month at $63.20 a barrel. This marked the fourth straight monthly loss for a front month contract, the longest losing streak since 2023. Widely held expectations for higher global supply has weighed on prices over the period, while easing geopolitical risk premiums have more recently added to the downside.

Markets this morning

Last weeks’ weakness across the NBP has continued into this morning, with the front month contract last going through at a 2.84p discount to Friday’s close. Productive peace talks held over the weekend between U.S. and Ukrainian officials are weighing on contracts, with peace in Ukraine seemingly closer than ever. The Day ahead contract has also shed value despite an expectation that temperatures are set to retreat from tomorrow, with high winds mitigating potential upside. In contrast, crude oil markets are up this morning after OPEC+ agreed yesterday to leave oil output levels unchanged for the first quarter of 2026. A Ukrainian drone attack on a Russian oil terminal on the Black Sea has also added to the upside.