A revised temperature outlook suggesting slightly warmer than previously forecast conditions for early January weighed on the NBP near curve on Tuesday, reversing the previous days’ gains.

Gas Market

Monday’s gains were largely retraced across the NBP curve yesterday, with the near months shedding an average of 1.84p per therm day-on-day. With contracts appearing to have been overbought during the previous session, Tuesday’s losses were seen as a correction. A revised temperature outlook for slightly warmer than forecast conditions during the first week of January also added to the downside, with the front month contract falling by 1.81p on its final day trading on ICE. Meanwhile, the Winter 26 contract also traded down, declining by 1.21p to close at 70.57p per therm. Despite temperatures set to remain below average over the coming days, contracts along the prompt market also fell, driven by the weakness on the near curve. The Day ahead contract fell by 0.95p to end the session at 74.90p per therm.

Power Market

Downside exhibited by the NBP gas curve and UKA carbon market filtered into GB Baseload prices on Tuesday. The front month contract shed £2.18/MWh day-on-day to close at £84.38/MWh as it neared expiry. High wind levels forecast for today weighed on the Day ahead contract, which shed 3.8% to settle at £80.50/MWh. An upward revision to both wind output and temperatures from next week added further weight to losses further along the prompt. Carbon prices eased somewhat yesterday, with trade volume extremely thin. European Allowances for Dec 26 shed €0.14 day-on-day to settle at €87.17 a tonne. Meanwhile, UK Allowances were slightly more pronounced, with the Dec 26 contract closing down by £0.51 to close out the session at £66.56 a tonne.

Oil Market

Crude oil prices ended flat on Tuesday after what was a choppy session driven by conflicting fundamentals. With no further progress made on a peace deal between Russia and Ukraine, downside was limited. The ongoing U.S. blockade of Venezuelan oil also continued to provide support, while recent strikes by a Saudi Arabia-led coalition on what it described as foreign military support to UAE-backed separatists in Yemen created further supply concerns. However, despite these renewed fears of supply disruptions, the potential for an oil supply glut in 2026 remained strong. The front month Brent contract shed just 2 cent day-on-day to settle at $61.92 a barrel, while the WTI contract for February delivery fell by 13 cent to close at $57.95 a barrel.

Markets this morning

NBP prices have opened higher this morning as fighting continues between Ukraine and Russia, while tangible progress towards peace remains limited. Yesterday Zelenskiy committed to continuing talks to end the war and that he was ready to meet Putin in any format, however this has done little to ease market risk. February 26, which is now the front month contract, last went through at 73.70p per therm, a gain of 1.64p day-on-day. The GB system is currently operating at a deficit, which may lift the Within day contract which is yet to trade. Crude oil markets have declined so far in today’s session, with the front month Brent contract shedding a modest 41 cents to last trade at $61.51 a barrel.