Gas Market
British NBP wholesale gas prices rose on Friday morning as cooler-than-seasonal temperatures lifted gas demand for heating. The front-month Feb-26 contract settled 1.95p higher at 75.76p/therm, supported by forecasts indicating the cold spell across Britain and central Europe will persist for longer than previously expected, alongside downward revisions to generation. Gains were capped by strong LNG availability, steady Norwegian flows and a generally comfortable supply backdrop. European gas storage was 61.37% full on Friday, down from 71.33% on the same date in 2025. Looking ahead however, global LNG supply growth is set to accelerate, with more than 40 bcm of additional LNG expected to enter the market in 2026, helping to ease medium-term supply concerns. Prompt prices gained on lower wind generation combined with colder weather, pushing the day ahead contract 2.45p higher on the day to 78.20p/therm.
Power Market
GB baseload power futures moved higher on Friday, tracking strength in gas and carbon markets. The front-month February contract gained £1.38 to settle at £83.88/MWh, while well below average temperatures for the rest of the first week of 2026 and lower wind output lifted prompt prices, with day-ahead power jumping 72.66% to £120/MWh.
On the first trading day of the year, Jan 2nd, trading was still modest, which reflected in a low volume before the Dec-26 EUA settled at €88.31/tonne, gaining 1.1% on a day. The benchmark contract advanced by 1% over the past week, bringing its cumulative gain to 7% since the beginning of December.
Oil Market
Oil prices settled lower on Friday, after recording their largest annual loss since 2020, as investors continued to weigh oversupply concerns against geopolitical risks, including the war in Ukraine and developments in Venezuela. Brent crude futures closed 10 cents lower at $60.75/bbl, with ample global supply offsetting concerns around potential supply disruptions from tighter sanctions on Venezuela. Over the weekend, U.S. President Donald Trump said Washington would take control of Venezuela and confirmed that the U.S. embargo on Venezuelan oil exports remains fully in effect, following a raid that led to the detention of President Maduro. In a global market characterised by plentiful supply, any further disruption to Venezuelan exports is expected to have limited near-term impact on prices. Around 80% of Venezuela’s crude exports are shipped to China, which is widely seen as having already built-up ample reserves. On an annual basis, both Brent and WTI fell by nearly 20% in 2025, the steepest decline since 2020. For Brent, this marked a third consecutive year of losses, the longest such streak on record.
Markets this morning
Gas prices have given up much of last week’s gains this morning, with the front-month February contract down 4.21p at 71.58p/therm, effectively reversing the 4.12p increase seen over the previous five sessions. The market has largely shrugged off geopolitical headlines around Venezuela, as strong LNG send-out, up 42mcm/d at 118mcm/d, alongside steady Norwegian flows and a comfortable supply backdrop, has kept sentiment bearish. In oil markets, Brent is trading flat around $60.79/bbl. Despite developments in Venezuela, the focus remains firmly on global oversupply, with OPEC+ holding output steady and expectations that supply will continue to outpace demand in 2026.
05 January 2026
