Energy Market Update - 01 April 2025
Energy prices held steady yesterday with minor gains in natural gas and power, supported by colder weather forecasts, upcoming Norwegian maintenance, and stable LNG arrivals. Ongoing geopolitical tensions and evolving EU storage policy discussions added further complexity to market sentiment.
Natural gas markets remained relatively unchanged on Tuesday, with front-month contracts seeing marginal movements. The TTF front-month contract settled at €41.00/MWh, up just €0.33, while the UK NBP front-month was priced at 98.70p/therm, rising slightly from the previous day. Gas injections over the weekend, coupled with news that the European Commission is considering greater flexibility in its 90% storage mandate by 1 November, helped calm market concerns. Lobbyists argue that with increased global LNG supply and existing storage at its lowest since 2022, less rigid targets may be appropriate. However, deepening tensions in the Russia-Ukraine conflict continue to prevent any sharp price falls.
The UK system opened balanced, with daily demand falling to 174mcm, about 57mcm below seasonal norms due to warmer temperatures. Norwegian flows held at 330mcm, and LNG send-out to the UK remained modest at 19mcm/day. Planned maintenance at Nyhamna and Aasta Hansteen later this week is expected to curb Norwegian exports, with curtailments forecast to rise to 82.4mcm/day from 2 April.
Power prices followed gas movements, with modest increases seen across the forward curve. The UK front-month baseload contract rose to £80.00/MWh, up £1.15, while the UK spot base settled lower at £87.95/MWh, reflecting fluctuating renewable output. Wind generation dipped sharply from 10.9GW to just 3.0GW, boosting reliance on gas-fired power, which climbed to 12.1GW and made up 44% of the UK generation mix.
Meanwhile, German spot base power eased to €94.22/MWh, down slightly amid stronger solar generation and milder temperatures. Wind output is expected to rise above seasonal averages until 6 April, likely reducing short-term gas-for-power demand. Across Europe, power market sentiment is being shaped by both renewable performance and national policies, with limited clarity from ongoing peace negotiations in Eastern Europe.
In broader commodities, Brent crude rose to $74.74/bbl from $73.63, supported by concerns that the US may impose new sanctions on Russian oil as frustrations mount over stalled ceasefire negotiations. Coal prices also increased, with the ARA CIF Cal-26 contract reaching $111.83/tonne, up from $108.33.
European carbon markets showed limited volatility; EUA December 2025 contracts dipped slightly to €67.98/tonne, with emissions demand subdued amid weaker industrial output forecasts. In LNG markets, JKM prices edged down to $13.08/MMBtu, while Henry Hub rose to $4.12/MMBtu, aligning with stronger US gas consumption forecasts.