Gas Market
Geopolitical developments on Monday evening, with Ukraine describing the talks as “90% positive”, continued to weigh on prices through Tuesday’s session. The front-month contract fell to an intra-day low of 68.34p/th before settling slightly higher at 68.54p/th, as optimism around a potential peace deal persisted. Further pressure came from the prevailing view across Europe that an LNG surplus will extend into 2026, reinforcing the ongoing market correction. This expectation has also limited the market’s sensitivity to negative headlines surrounding the peace talks. Summer contracts settled at 62.84p/th, marking a fresh 45-month low amid sustained bearish sentiment. On the prompt, the day-ahead contract fell to 68.80p/th, with additional bearish pressure stemming from an outage on the interconnector between Britain and Belgium, limiting export flows to the Continent.
Power Market
The weak NBP gas market continued to weigh on GB baseload power prices on Tuesday, with all traded contracts declining over the session. The Summer baseload contract settled at £66.00/MWh, pressured by softer gas prices and a weaker UKA market, which moved in contrast to firmer EUA values. On the prompt, the day-ahead contract fell by 10% as forecasts for elevated wind generation weighed heavily on prices.
The bellwether Dec-26 carbon contract climbed to 25-month highs during Tuesday’s session as year-end positioning continued to support prices. Carbon markets remain firmly bid and, according to some traders, may be approaching a peak, continuing to shrug off the prevailing weakness across gas, oil and power markets.
Oil Market
Oil prices moved sharply lower on Tuesday, settling at their weakest levels since February 2021 as concerns over oversupply intensified and optimism grew around a potential Russia–Ukraine peace deal. Brent crude fell $1.64 to settle at $58.92/bbl, while WTI dropped $1.55 to close at $55.27/bbl. Reports of progress in diplomatic talks, including U.S. proposals on security guarantees for Ukraine, added to expectations that sanctions on Russian supply could eventually be eased, despite Moscow reiterating its refusal to make territorial concessions. Softer Chinese economic data further weighed on sentiment, reinforcing demand concerns. The market remains focused on the growing risk of oversupply heading into 2026, although with the Brent forward curve shifting into contango, it appears as if the oversupply is now priced in.
Markets this morning
Following yesterday’s decline, NBP gas prices have rebounded this morning after hitting fresh multi-year lows. The Q1-26 contract last traded at 70.62p/th, up 2.08p from Tuesday’s settlement, while Summer-26 has also strengthened, rising 1.46p from its 45-month low. Oil markets have rebounded as well, following news late last night that U.S. President Trump has ordered a blockade on all sanctioned oil tankers entering or leaving Venezuela. Venezuelan oil accounts for around 1% of global output, and the overall impact is expected to be limited, affecting only a small group of buyers.
17 December 2025
