Energy Market Update - 12 December 2025
Markets firmed as carbon rallied and cooler, lower wind conditions lifted gas and power. Storage and Norwegian flows remain supportive, while Ukraine headlines curbed optimism.
Gas moved higher into the close, led by the UK front month. January 26 NBP gained about 0.59 pence per therm as lower prompt wind and slightly cooler temperatures raised gas-for-power demand. Storage remains a solid backstop at about 71.6 per cent, though withdrawals have picked up. Norwegian pipeline exports held near 340 mcm per day, keeping continental balances comfortable. LNG send out was steady and helped cap the upside, but traders stayed alert to weather and any fresh offshore constraints. Headlines from Kyiv suggested territorial issues remain under discussion, which tempered recent optimism around talks.
Power followed gas. Day ahead firmed on weaker wind through the trading window before easing late as output recovered. Curves edged up with fuels, with winter strips holding a modest premium. Lower renewable availability kept CCGT margins in play across evening blocks, while imports provided cover when wind dipped. With wind profiles still choppy and temperatures close to seasonal norms, intraday volatility is likely to persist, but the medium view remains anchored by fuel and carbon costs.
Other commodities lent a supporting tone. EU carbon rallied to a ten month high, tightening clean spark economics and helping to underpin forward power. Oil was broadly steady and coal little changed, offering limited direction, while gas benchmarks outside Europe were stable, keeping Atlantic cargo flows predictable.