Near Curve Gas Prices Rebound Following Monday’s Losses

Gas Market

Following Monday’s sharp losses, gas prices rebounded during Tuesday’s trading session. The sell-off earlier in the week prompted renewed buying interest, particularly along the near curve, where the February contract settled at a premium of 1.88p/th to Monday’s close, assessed at 72.72p/th. Prices were further supported by a downward revision to UK temperature forecasts for at least the coming week, which underpinned near-term contracts. Strength along the near curve also filtered through to the front season, with the Summer-26 contract rising by 0.97p to settle at 64.64p/th. On the prompt, persistently colder conditions kept the Within-Day and Day-Ahead contracts elevated, as GB gas demand reached its highest level on 5 January since December 2022. Updated weather forecasts also lifted weekend and next-week prices, which increased by 2.9% and 3.7% respectively.

Power Market

The GB baseload day-ahead contract fell yesterday as higher wind generation weighed on prompt prices. However, losses were limited as temperatures remaining more than 3 degrees below seasonal norms continued to underpin power demand. Further along the curve, the February contract tracked gains in the NBP gas market, while strength across the curve was reinforced by the UKA allowance market, where prices rose by 1.9%. European and UKA carbon prices both increased on Tuesday. Persistent cold weather across GB and Europe appeared to be a key driver, as lower temperatures lifted thermal power generation and, in turn, increased demand for allowances to cover associated carbon emissions.

Oil Market

The front month Brent crude oil contract fell to $60.70/bbl on Tuesday as traders focused on expectations of plentiful global supply heading into 2026, overshadowing uncertainty surrounding Venezuelan output following the U.S. capture of President Nicolas Maduro. The market already appears well supplied regardless of whether Venezuelan production recovers, with OPEC and non-OPEC output having expanded sharply over the past year while demand growth lagged historical norms. There is a concern that this imbalance could leave the market facing a sizable surplus in early 2026, reinforcing the bearish sentiment. While some participants see the potential for additional barrels if U.S. sanctions on Venezuela are eventually eased and foreign investment returns, others caution that years of underinvestment mean any rebound would take time.

Markets this morning

NBP gas prices remain strong this morning following yesterday’s downward revision to temperatures. The front-month contract is trading 4% higher in early trade, while the Summer-26 contract is 1.17p up at 65.81p/th. Flows into GB from Norway remain robust, leaving the system oversupplied despite strong demand via the Moffat Interconnector with Ireland. Brent crude is trading lower this morning after comments from Trump that the United States has reached a deal to import between 30 and 50 million barrels of oil, a move likely to boost supplies to the world’s largest oil consumer.