Gas Market
A downward revision to European temperature forecasts, particularly for the UK, drove a rally in gas prices across Monday’s session. The latest outlook points to temperatures well below seasonal norms over the next two weeks, prompting a short-term bullish response. Reflecting the near-term nature of this driver, gains were concentrated in the prompt and near curve. The front-month contract, in its penultimate trading session on ICE, rose by 1.85p/th to settle at 75.83p, while the day-ahead contract increased by 3.20% to 75.85p/th. Further along the curve, price movement was more subdued, with the Summer-26 contract thinly traded and adding just 0.60p to settle at 66.16p/th. The front-month rally widened the NBP premium to 2.77p/th over the equivalent TTF contract, aimed at attracting LNG into the UK during the colder forecast period.
Power Market
Reflecting the sharp move higher on the NBP, near-curve GB baseload contracts gained value across Monday’s session, with the January contract rising to £86.55/MWh. The colder weather forecast that supported gas prices also lent support to the GB power market. However, losses in the UKA carbon market limited gains further along the curve, with some contracts posting declines. The Summer-26 contract traded largely sideways, caught between firmer gas prices and weaker carbon.
Trading in the EUA market was subdued during the holiday period, with reduced participation weighing on prices as demand for allowances fell below typical levels. The Dec-26 contract declined by €0.76 to settle at €87.31/tonne.
Oil Market
Oil prices rose by over 2% on Monday as markets weighed renewed momentum in U.S.–Ukraine peace discussions and escalating tensions in the Middle East. Comments from President Zelenskyy pointed to progress in talks with the United States, although uncertainty remains around the framework and timing of any potential agreement with Russia, while the accusation of a Ukrainian drone attack on Putin’s residence also lent support to crude prices. At the same time, renewed instability in the Middle East, including recent Saudi air strikes in Yemen, heightened concerns over possible supply disruptions. Thin holiday trading conditions amplified price moves, allowing crude to rebound from recent losses despite broader concerns around ample global supply heading into 2026.
Markets this morning
The fallout from the alleged attack by Ukraine on one of Putin’s residences has done little to lift gas prices this morning. In fact, early trading sees declines, with the Jan-26 contract—in its final day of trading—down 1.65p/th on Monday’s settlement. Further along the curve, the Summer-26 contract is also losing ground, last trading at 67.75p/th. Oil prices are largely unchanged Tuesday morning as markets weigh fading hopes of a Russia–Ukraine peace deal against rising Middle East tensions around Yemen, with crude last trading marginally higher at $62.26/bbl.
