Market outlook
The individual commodities in energy trading are currently going their own ways – and natural correlations such as electricity and emission allowances are decoupling. Gas is also trading lower than storage levels in the last quarter would suggest.
December 2025
Here are the details:
Electricity & emission allowances
The last month of the year started on an upward trend for the spot electricity market – or ‘bullish’ in trader slang. Cooler temperatures and low wind feed-in drove day-ahead prices up to EUR 170/MWh in the base. Together with prices for emission allowances (European Union Allowances, EUA), which were above 84 EUR/tonne on 2 December, the conditions for a year-end rally in forwards seemed perfect – or so one might think. But things turned out quite differently.
On the forward market, the 2026 base product was already weakening at the end of November, falling from its early November highs of 91 EUR/MWh to a level of just over 87 EUR/MWh. This already indicated a decoupling of the electricity and EUA markets. As a result, despite record EUA prices, the electricity base slipped below £85/MWh at the beginning of December – a surprising development that is difficult to explain without looking at gas prices.
Gas
Gas prices have been performing poorly across all products for weeks. On 2 December, the 2026 gas year traded at its lowest level since March 2024. With the breakthrough below EUR 30/MWh, the front year sent a clear bearish signal. Flanked by very weak day-ahead prices, which have also been trading below EUR 30/MWh since December, gas is setting the tone for the forward electricity market: it is heading downwards.
The very good supply of pipeline gas from Norway and LNG from the USA is pushing down prices and does not allow for a bullish scenario despite the winter months. Added to this is a medium-term temperature forecast with values above the norm. The cool temperatures at the beginning of December and, at the same time, extremely low spot prices on the gas market are currently causing analysts to look perplexed. The question also arises as to how gas storage operators are dealing with the current weak price scenario. While price levels during the injection season were still well above £30/MWh, the price currently being achieved for gas withdrawal is nowhere near this level.
Coal
The mood on the coal market is different. The API2-2026 product has been trading between 95 and 105 USD/tonne since August and shows no signs of moving up or down. The limited news on the coal market is not enough to move the market in a sustainable way.
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