Snapshot - 19 December 2025
European gas and power benchmarks firmed through Thursday as confidence in a colder period over Christmas into early January lifted risk premia. Inventories remain below recent norms and Norwegian flows eased to around 348 mcm/day, tightening the prompt at the margin. Carbon added support. The year-end pause in EUA auctions and ongoing discussion of UKA–EUA linkage kept carbon bid, lifting longer-dated UK power even as near-term direction remains driven by wind.
Prompt and near-curve gas edged higher on a colder turn in short-range forecasts and thinner pre-holiday liquidity. EU storage remains well stocked in absolute terms but is materially lower than the same point last year, so a sustained cold spell would increase reliance on withdrawals and raise sensitivity to supply disruptions. Supply remains broadly comfortable despite the day-on-day slip in Norwegian nominations. LNG send-out stayed active and US feedgas remained close to recent peaks, providing a buffer against Norwegian variability. Market attention remains split between weather, LNG shipping schedules and Russia–Ukraine headlines, which continue to drive brief intraday swings without changing the broader balance.
UK day-ahead baseload tracked gas higher as wind eased and temperatures drifted lower, tightening the evening peak. Forecasts point to volatility into the holiday period, with strong output periods interspersed with lulls. Interconnector flows remain supportive, with French nuclear availability healthy but responsive to continental demand spikes. Along the curve, winter and summer strips were supported by firmer gas and stronger carbon. Clean spark economics improved modestly as UKAs and EUAs advanced, though outright gains remain measured given soft industrial demand and still-robust renewable expectations beyond the immediate cold window.
Crude eased within its range as ample physical supply and weak product demand offset intermittent geopolitical bids. Turkish Straits delays added localised freight noise without changing the surplus narrative. Carbon remained the strongest cross-asset signal, with EUAs extending gains on reduced auction supply into year end and UKAs tracking higher on linkage sentiment. Coal and FX were broadly stable and secondary for power pricing. Other developments included Israel approving long-term Leviathan exports to Egypt, new UK sanctions targeting an alleged facilitator of Russian energy exports, manageable short-term adjustments in French nuclear and hydro output, expectations that Norway remains broadly robust despite minor curtailments, constructive LNG inflows supported by high US feedgas and the carbon auction pause continuing to buoy both schemes.
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