Energy Market Update - 31 December 2025
Prices drifted lower on Tuesday, with a softer near curve as milder forecasts and improving renewable output offset a cold UK start and steady supply.
Natural gas saw prompt weakness despite a tighter morning balance. Norwegian exports recovered, with nominations near 334 mcm per day as the Troll issue eased, and UKCS receipts were firm. LNG send-out remained strong, underpinned by a dense slate of Atlantic cargoes into North-West Europe and ongoing US supply. Pan-European storage sat in the low 60s per cent after steady withdrawals, which is manageable given the outlook. The UK system opened comfortable, though linepack tightened intraday. Day-ahead NBP was marked near 74.75 p per therm by the previous settlement. Forward pricing stayed range-bound as models turned a touch milder into January while still below seasonal norms.
Power followed gas but was choppy intraday. Day-ahead UK baseload settled around £81.50 per MWh, easing as wind rebuilt into the late blocks. Interconnector flows were broadly neutral and nuclear output stable, though outages at a handful of units keep some resilience in peak pricing. Forecasts point to stronger wind into the weekend, which should temper cash prices and reduce CCGT burn, before another colder spell lingers through early January. Curve moves were modest, with February and Q2 offers little changed in early indications.
Other commodities were stable to softer. Brent hovered near 62 dollars per barrel as ample supply and year-end positioning outweighed geopolitics. EU carbon held in the high 80s euros per tonne, continuing to lend a cost floor to forward power even as gas sets direction day to day. API2 Cal-26 traded in the mid 90s dollars per tonne, with muted utility hedging. In LNG, JKM stayed near the high 9 dollars per MMBtu, close to European hub parity, keeping Atlantic-Pacific arbitrage tight.