Colder Weather Lifts Gas and Power as Oil Slips on Venezuelan Supply Increase Hopes

Gas Market

Gas prices remained firmly weather-driven yesterday, with colder temperatures and below-normal wind generation forecasts supporting near-curve NBP contracts. The front-month Feb-26 contract gained 1.77p on the day to settle at 74.49p/therm. Lower temperatures across Europe lifted heating demand and drove higher storage withdrawals, with EU gas storage levels falling by 1.01 percentage points on the day to 58.06% full, over 11% below the 69.32% recorded at the same point last year. Further gains were capped by strong LNG send-out, which rose 4mcm/d to an already high 131mcm/d, alongside steady Norwegian flows. Price moves further along the curve were more subdued, with Summer-26 edging 0.72p higher to 65.36p/therm.

Power Market

GB baseload power futures strengthened on Wednesday, tracking gains in the gas market as colder weather forecasts lifted near-term demand expectations. The front-month February contract rose £1.38 to settle at £83.00/MWh, marking a second consecutive daily increase and almost fully retracing Monday’s losses. Day-ahead power was notably stronger, jumping 31.7% to £118/MWh as colder conditions were anticipated through the remainder of the week. European carbon markets opened the session on a bullish footing but lost momentum as early buying gave way to selling pressure. While rising gas prices amid colder weather forecasts continues to provide underlying support, the benchmark Dec-26 EUA contract ultimately settled little changed, edging 6c higher on the day to €88.13/tonne.

Oil Market

Oil prices settled lower for a second consecutive session on Wednesday as markets absorbed news of a U.S.–Venezuela deal that would allow up to $2 billion of Venezuelan crude to be imported into the United States, adding to global supply. Front-month Brent crude closed down 74 cents, or 1.2%, at $59.96/bbl. U.S. President Trump said Venezuela would “turn over” between 30 million and 50 million barrels of sanctioned oil to the U.S., a move likely to require the rerouting of cargoes previously destined for China. The agreement follows weeks of disrupted exports, with millions of barrels sitting in tankers and storage after Washington imposed a blockade on Venezuelan shipments in mid-December. Some support was provided by U.S. inventory data, with crude stocks falling by 3.8 million barrels to 419.1 million barrels in the week to 2 January, according to the EIA, against expectations for a modest build of 447,000 barrels.

Markets this morning

Gas prices have given back much of the gains from the past two sessions this morning, with the front-month February contract down 2.89p at 71.62p/therm after briefly touching an intraday low of 70.76p/therm. Sentiment remains heavily weather-driven, with milder temperature forecasts expected to curb heating demand. The British day-ahead contract is also under pressure, down 4.2p so far at 73.00p/therm. Oil prices are steadier this morning, edging back above $60/bbl to trade around $60.47/bbl, as geopolitical tensions involving the U.S., Venezuela and Russia remain in focus following the seizure of an empty Russian-flagged, Venezuela-linked tanker in the Atlantic Ocean.