Reports that Ukraine was open to “the essence” of the proposed peace deal pushed gas prices lower during afternoon trading on Tuesday

Gas Market

The NBP gas market opened quietly on Tuesday as traders monitored developments around the proposed Ukraine-Russia peace agreement. Early comments attributed to President Zelensky, suggesting further work was still needed, kept prices flat through the morning. Sentiment shifted in the afternoon when initial U.S. reports indicated Ukraine had accepted the deal, sending prices lower before subsequent clarification noted Kyiv had agreed only to “the essence” of the proposal. The headline uncertainty pushed the market to an intra-day low, with the Summer-26 contract dropping to 69.1p/th before paring losses to settle at 69.68p—the first close below 70p since May 2024. Meanwhile, the Russian Deputy Prime Minister was in Beijing to discuss expanding oil and LNG trade between the two countries, reinforcing Russia’s broader strategy to deepen energy ties with China as Western sanctions continue to restrict traditional export routes.

Power Market

Price movements on the GB baseload power market were relatively muted compared to the sharper losses seen on the NBP gas market. Despite the Dec-25 gas contract falling to new 21-month lows, the equivalent baseload contract gained value, supported by persistently low wind generation. Adding to the bullish tone for December was news that an offline nuclear reactor has had its return date pushed back to mid-December. Further support for power prices came from continued strength in both the UKA and EUA carbon markets. Despite weakness across the wider energy complex, EUAs and UKAs have continued to buck the trend. Some analysts believe that an eventual end to the war in Ukraine could stimulate economic activity in the UK and EU, increasing demand for carbon allowances.

Oil Market

Oil prices fell on Tuesday as signs emerged that Ukraine may be open to a U.S.-backed peace framework, raising the prospect of a resolution to the conflict and a potential rebound in Russian supply. The possibility of sanctions being lifted has added to concerns about an already anticipated surplus in 2026, with analysts warning that a peace deal could unlock sizable volumes of Russian crude currently stranded at sea following cancelled Asian purchases. The purchases were put on hold following the latest U.S. measures targeting Rosneft and Lukoil, and rules preventing oil products refined from Russian oil from being imported to the EU. Additional pressure came from reports that Russia and China have been in talks to expand oil flows to Beijing, reinforcing expectations of growing supply into an already well-stocked market.

Markets this morning

NBP gas prices opened broadly in line with Tuesday’s close as the market continued to track developments around the potential Ukraine–Russia peace agreement. The front-month contract edged down to 76.52p/th, while Summer-26 extended its recent declines, trading 0.45p below Tuesday’s settlement. Activity in Winter-26 has been notably stronger than in the summer strip, with the contract sliding to 75.95p/th, more than half a penny lower on the day. Oil markets are also steady after yesterday’s losses, with participants similarly awaiting clarity on the peace discussions. The front-month crude contract last traded at $62.42/bbl, largely unchanged from Tuesday’s close.