Crude oil prices settled higher for a second day as supply risks mount

Gas Market

After a directionless start to the day near NBP curve contracts continued to flip between gains and losses for much of the morning before firming through the afternoon. Near months settled around 0.70p per therm higher after increased buying activity and forecasts for lower-than-average temperatures from next week. Futures contracts from the summer out were modestly higher at the close posting gains of less than a half a penny for the most part. Forecasts for below average wind generation coupled with the lower temperatures to the end of the year provided a boost to the Balance of month product on the prompt which settled 0.75p up at 71.75p, however, a long gas system saw the Spot fall by a half a penny yesterday. Gains to the prompt were tempered as the cold spell should coincide with lower demand from industry due to the holidays.

Power Market

GB baseload power futures were supported by the gains to the NBP curve in the afternoon session on Thursday. The front month, January, settled £1.63/MWh higher at £83.33/MWh, while the Summer-26 product closed at £68.48/MWh, up £1.22/MWh. A robust performance from wind generation pressured the Day ahead contract yesterday which declined by 6.6% or £4.27/MWh. Wind was top of the power stack meeting 45% of supplies. Early losses to carbon EUAs were partially recovered late in the session to leave contracts down by an average of €0.52/ tonne yesterday. UKAs posted sharp gains on the back of reports that the UK and Europe are to finalise an agreement on linking the two markets at the next summit in mid-2026.

Oil Market

Crude oil prices were marginally higher at the close as the market weighed up the potential impact of a blockade of Venezuelan tankers and the possible addition of further sanctions on Russia’ energy. A blockade of tankers could impact 600,000 barrels per day most of which is exported to China but could revive crude oil prices if extended. President Trump has hinted that the peace talks might be ‘getting somewhere’ as discussions are to continue at the weekend between Russian and U.S. officials. However, there are reports that further sanctions could be levied on Russia’s energy sector if Moscow is not inclined to reach a deal to bring about peace in Ukraine. The February contract for Brent settled 14 cents higher at $59.82 a barrel.

Markets this morning

The gas markets opened higher this morning with the front month extending gains to peak over a penny higher at 74.25p per therm. However, latest trades have seen the January contract fall back to last trade at 73.37p, which is 0.27p above last night’s close. The Summer-26 contract is 0.24p up at 64.50p while the Winter-26 last traded at 70.50p, up 0.40p. Prompt prices are yet to get off the mark, but a short gas system is likely to offer support to the Spot price. In the crude oil markets, Brent last exchanged at $59.55 a barrel reversing all of yesterday’s gains as it is uncertain as to how the U.S. could enforce a blockade of sanctioned Venezuelan oil.