18th December 2025 - UK energy markets are heading into Christmas with prices firmer on the curve, but mixed signals still dominating the near term.
Gas markets edged higher yesterday as bullish near-curve sentiment outweighed mild weather and strong Norwegian supply.
UK NBP day-ahead settled around 70 p/therm, with gains seen further along the curve as colder weather risks later in the period, lower renewable output and a stronger oil complex provided support.
Despite Norwegian nominations sitting close to recent highs and LNG send-out remaining robust, storage withdrawals across Europe continue at a healthy pace, keeping traders cautious as we move through winter.
This morning, UK gas prices are marginally firmer across the curve, although liquidity remains thin.
Updated weather forecasts point to milder conditions through Christmas Day, before turning cooler thereafter, while UK wind output is expected to peak into the weekend and then drop below seasonal averages.
The market remains highly sensitive to any shift in temperature expectations, with gas continuing to set the marginal price for power in many periods.
In power, UK day-ahead baseload softened to around £66/MWh, reflecting improved wind output and easing system tightness, while peak prices also moved lower.
Further out, however, the curve continues to lift, tracking gas strength and ongoing nuclear outages, which keep the medium-term supply picture constrained.
Gas-to-power economics remain supportive, reinforcing the link between the two markets.
Oil prices moved higher again on supply concerns and geopolitical tensions, adding another layer of support to the forward energy complex.
Carbon eased slightly on the day, but remains elevated, continuing to influence thermal generation costs across Europe.
Overall, spot markets are being pulled in opposite directions by mild weather and strong supply, while the forward curve reflects persistent structural risks.
As we head into the festive period, volatility remains very much on the table, with weather, geopolitics and liquidity all likely to drive sharp moves.
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