UK Energy Market Update: 1st - 5th December 2025
Cal26 Crashes Below 67p — Another Big Week of Falls
This week delivered another round of significant price drops. Cal26 gas fell 6.4% to close at 66.94p — breaking below 67p for the first time. Q1-26 dropped 8%. Friday alone saw Cal26 crash 3.5% in a single session. The driver? Mild weather arriving, strong wind generation, and continued bearish sentiment. Fundamentals remain soft. If you're renewing soon, these are excellent prices.
Forward Contracts (Week Close – 5 Dec) — These Prices Matter for Your Renewal
What Happened This Week
Monday–Tuesday: Steady Decline Continues
The week opened with markets continuing their downward drift from November. Cal26 gas fell from 70.71p to 69.51p. No major headlines — just steady selling as fundamentals remained bearish. Mild weather forecasts and strong LNG supply kept pressure on prices.
Wednesday: Witkoff-Putin Talks — No Deal But No Escalation
Trump's envoy Steve Witkoff met Putin for 5 hours. Result: no deal, but described as "constructive". Markets didn't react dramatically — the geopolitical risk premium had already been priced out last week. EU also confirmed phasing out Russian gas by 2027, but this was expected.
Thursday: Consolidation Day
Markets paused. Cal26 gas edged up 0.13% to 69.38p — essentially flat. After days of falls, traders took a breather. But fundamentals hadn't changed.
Friday: The Big Drop — Cal26 Crashes 3.5%
Friday delivered the week's major move. Cal26 gas crashed 3.51% to 66.94p — breaking below 67p for the first time. Markets gapped down overnight. Q1-26 fell 4.2% in a single session. The driver: mild weather arriving from Saturday, strong wind generation forecast, and continued bearish sentiment. This was broad-based selling across all forward contracts.
How Much Prices Changed — Forward Contracts Tell the Story
WEEK'S CHANGES 28 Nov → 5 Dec 2025
📉 Two-Week Perspective: 22 Nov → 5 Dec
Combining last week's peace-talks rally with this week's fundamentals-driven falls:
❄️ Winter vs Summer: The Seasonal Gap
The pattern continues: Near-term contracts (Q1-26: -8.0%) fell harder than longer-term (Cal-28: -2.9%). This is the second consecutive week of this pattern. Markets are repricing both geopolitical risk AND near-term weather/demand expectations. The closer the contract, the more sensitive to current conditions.
Why Prices Fell — Fundamentals Took Over
1. Mild Weather Arriving
After weeks of cold, mild temperatures finally arriving from Saturday. Above-seasonal forecasts through mid-December. Less heating demand = less gas needed = lower prices.
2. Strong Wind Generation
Strong winds across UK and Europe reducing gas-for-power demand. When turbines spin, gas plants sit idle. This drove Friday's spot power crash (-7.35%) and pulled forwards down.
3. LNG Supply Remains Strong
Multiple LNG cargoes arriving this week. Norwegian flows steady. No supply concerns. EU storage at 74.4% — lower than last year but still comfortable for this point in winter.
4. No Geopolitical Escalation
Witkoff-Putin talks produced no deal but no escalation either. EU's 2027 Russian gas phase-out was expected. Markets had already priced out geopolitical premium last week — this week, fundamentals took over.
✓ This Week Was Different From Last Week
Last week's 7% fall was driven by geopolitical risk repricing(peace talks). This week's 6.4% fall was driven by fundamentals(mild weather, strong wind, good supply). Different drivers, same direction. The combination has pushed Cal26 gas down over 13% in two weeks.
What This Means for You
✓ Cal26 Below 67p — A Major Milestone
Cal26 gas at 66.94p is the lowest we've seen. This matters if you're locking in 2026 contracts. Two weeks ago it was 77p. The window is open.
✓ Fundamentals Are Now Bearish
Mild weather, strong wind, good supply. Unlike last week (geopolitical), this week's drivers are structural. If weather stays mild and wind stays strong, there's room for prices to fall further.
⚠ Weather Can Flip
Mild weather is forecast through mid-December, but winter is long. A cold snap in January could reverse some of these gains. If you need winter energy, these prices are excellent — don't assume they get better.
⚠ Friday's Move Was Big
Cal26 crashing 3.5% in a single session is significant. Markets can move this fast in both directions. If you're waiting for "the perfect bottom", you might miss it entirely.
Should You Lock Your Renewal? — Based On When Your Contract Ends
The answer depends entirely on when your contract ends. Cal26 at 66.94p is excellent value. Q1-26 at 69.10p is down 15% in two weeks. If you need energy soon, these are strong prices. If you have time, fundamentals suggest there may be room for more — but weather can flip.
Analysis: Q1-26 gas at 69.10p is down 15% in two weeks. You need winter energy — you can't wait for summer. These are excellent winter prices. Weather is mild now, but January could be cold. Recommendation: GET QUOTES NOW. Lock before weather forecasts flip.
Analysis: Q2-26 gas at 64.99p is cheaper than Cal-27 (65.67p). You get spring rates without waiting through summer. Excellent value. Recommendation: GET QUOTES NOW. Spring is attractive; no need to wait.
Analysis: Summer 2026 at 64.57p is attractive. You have 6+ months. Fundamentals are bearish — if mild weather and strong wind continue, there may be room for more falls. Recommendation: WAIT AND MONITOR. Check weekly; you're in good position.
Analysis: Cal-28 at 63.30p is the lowest available. You have plenty of time. Longer-term contracts are more stable and less sensitive to weather swings. Recommendation: WAIT AND MONITOR. Target longer-term contracts; prices improve the further out you go.
🎯 THIS WEEK'S KEY POINT
Cal26 crashed below 67p on Friday — the biggest single-day move in weeks. Two weeks of falls (geopolitical + fundamentals) have pushed prices down over 13%. If you need energy soon, these are excellent prices. If you have time, fundamentals suggest there may be room for more — but don't wait too long. Weather can flip, and markets move fast in both directions.
What To Watch Next Week
Weather Forecasts: Mild conditions expected through mid-December. If forecasts hold, downward pressure continues. If cold snaps appear in January forecasts, prices could bounce.
Wind Generation: Strong wind is currently crushing spot power prices. If wind stays strong, gas-for-power demand stays low. Watch for any calm spells.
LNG Arrivals: Multiple cargoes expected at UK terminals. Supply picture remains comfortable. Any delays or diversions could add slight tightness.
Market Correction: After Friday's sharp drop, Monday could see some bounce as traders correct oversold positions. This is normal — it doesn't mean the downtrend is over.
Cal26 Below 67p — Another Week of Major Falls
Mild weather, strong wind, and good supply pushed prices down another 6.4% this week. Cal26 gas broke below 67p for the first time. Q1-26 down 15% in two weeks.
Need energy soon? Lock these prices. Have time? Monitor weekly — fundamentals are bearish but weather can flip. Either way, know where you stand.
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