Snapshot - 18 December 2025
Prices firmed modestly midweek as forecast revisions trimmed wind output by around 1 GW and nudged temperatures lower. The move was technical rather than fundamental. Norwegian pipeline supply remains strong and LNG availability steady, which limited follow-through. UK carbon provided additional support, with UKA Dec-26 trading around £60.2 on improved sentiment around a possible UKA–EUA linkage in 2026. Geopolitics remains a swing factor into year end, but the physical system is still well supplied.
Gas curves edged higher at the front as cooler revisions lifted heating load and gas-for-power demand. Any prompt tightness proved short-lived. Higher Norwegian nominations and robust US feedgas maintained physical cover, while storage remains seasonally comfortable with measured withdrawal rates. Further out the curve, gains were muted as participants balanced intermittent cold risks against milder early-January scenarios. With Asian demand uneven and Atlantic LNG logistics fluid, Europe continues to attract cargoes without bidding aggressively.
UK power tracked gas higher near term as lower wind lifted the thermal call and tightened peak hours. Day-ahead and prompt peaks responded first before easing as intraday wind recovered. Further along the curve, baseload moved less, reflecting benign continental hydro and nuclear availability and firm interconnector support. Carbon strength capped downside in power and improved clean sparks in the prompt, though far-dated sparks were steadier as power again underperformed gas.
Crude remains range bound after recent declines. OPEC+ caution is offset by ample non-OPEC supply and soft product demand, leaving curves flat and prompt spreads subdued through year end. Carbon diverged. EUAs extended gains into options expiry and the pre-holiday auction pause, with UKAs firming in sympathy and on linkage optimism. The differential narrowed at times but remains wide. Overall, carbon is providing a modest floor for power, while gas fundamentals continue to point to a comfortable winter balance unless weather or supply guidance shifts materially.
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