Energy Market Update - 02 April 2025
Gas and power markets rose sharply on Tuesday, driven by renewed geopolitical tensions and concerns about EU gas storage levels. Despite stronger Norwegian supply outlooks, market sentiment remained bullish.
European and UK gas markets surged following comments from the Russian deputy foreign minister rejecting US peace proposals, stating they failed to address the conflict’s root causes. This was compounded by further reports that Russia had not complied with the energy ceasefire, heightening concerns of ongoing disruption to future gas flows. As a result, the UK front-month NBP contract jumped by nearly 5p/th to settle at 102.65p/th, while the Winter 2025 contract reached a recent high of 108.45p/th.
These gains were slightly tempered by reassurances from Gassco that Norwegian gas deliveries this summer would exceed last year’s levels, reducing fears of supply shortages. Nevertheless, the commencement of seasonal maintenance on the Norwegian Continental Shelf, including fields such as Nyhamna and Dvalin, introduced tighter flows, with nominations falling to 307 mcm/day. The UK system also faced pressure from Bacton Perenco maintenance and lower domestic production, with Langeled flows notably reduced by over 16 mcm/day. EU gas storage levels remain a key concern, standing at just 33.59% full — well below last year’s levels — adding further support to prices as the region faces the challenge of reaching its 90% storage target by November.
Power markets followed the gas market higher across the curve, although prompt prices softened due to improved renewable generation forecasts. The UK baseload front-month contract rose to £82/MWh, up £4 from the previous day, and the Winter 2025 contract gained to £93/MWh. Spot prices, however, dropped to £73/MWh amid an increase in wind generation, which provided temporary downward pressure. Forecasts now indicate a fall in wind output from early next week, coinciding with a dip in temperatures and higher demand.
The return of Torness 1 nuclear reactor also contributed to day-ahead power availability, although ongoing nuclear outages across several sites continue to constrain supply. Cross-border interconnector flows remained relatively stable, but market participants continue to monitor the implications of potential geopolitical developments, including expected announcements on US trade tariffs and energy sanctions.
Brent crude edged lower to $74.49/bbl, retreating slightly from earlier highs. The market remains sensitive to the anticipated statement from President Trump regarding new global tariffs, which could affect global economic growth and fuel demand. Meanwhile, European carbon prices climbed, with EUA December 2025 contracts rising to €69.86/tonne, as concerns over tighter emissions policies and speculative trading provided support.
Coal markets also strengthened, with the ARA CIF Cal-26 contract increasing to $113.75/tonne amid firmer demand signals from Asia and constrained supply flows. In the LNG market, JKM rose modestly to $13.23/MMBtu, closely tracking the TTF equivalent of $13.46/MMBtu, reflecting tight shipping availability and strong European regasification activity.