Energy Market Update - 04 April 2025
Energy markets dropped sharply on Thursday as global traders responded to the economic impact of new US tariffs and an unexpected OPEC+ output increase. The downturn was compounded by potential changes in EU gas storage policy and ongoing Norwegian supply constraints.
Natural gas prices declined across the curve amid concerns about global economic activity following President Trump’s tariff announcement. The NBP front-month contract settled at 95.38p/therm, down from 102.65p, while the TTF equivalent fell to €39.20/MWh from €42.45. Markets were unsettled by the introduction of a 10% US tariff on all imports and an additional 34% levy on Chinese goods, raising fears of reduced industrial output and energy consumption. European gas prices also tracked weaker financial markets, with declines in major equity indices reflecting broader economic uncertainty. Despite bearish sentiment, unplanned maintenance at the Kollsnes facility in Norway disrupted 54 mcm of capacity, though this had limited impact as traders had largely priced in summer maintenance schedules. Nominations from Norway to the UK were reduced to 287 mcm/day, down from 302 mcm/day. EU gas storage levels edged up slightly to 34.35% full, supported by milder temperatures reducing demand and allowing for injections.
UK power prices moved in line with gas, with the baseload front-month contract dropping to £77/MWh from £80, and the front-season contract declining to £88/MWh from £91. The bearish move in the power market also reflected lower demand expectations and the broader weakness in energy commodities. Wind generation remains forecast to stay below seasonal norms until mid-April, which may offer some support to short-term prices. However, the overriding sentiment was shaped by macroeconomic concerns and falling gas prices. Spot baseload prices held at £68/MWh.
In other commodities, Brent crude fell steeply to $70/bbl from $75 as OPEC+ announced a surprise tripling of output increases for May. The move added to selling pressure already present due to fears of reduced global energy demand stemming from trade tensions. European carbon prices also reversed course, with EUA December 2025 contracts retreating to €66.06/tonne from €69.00, driven by lower industrial activity expectations and broader market sell-offs. Coal prices eased, with the ARA CIF Cal-26 contract falling to $108.26/tonne, down from $111.48. In LNG, JKM slipped to $13.08/MMBtu from $13.19, while Henry Hub edged up to $4.14/MMBtu from $4.06. TTF’s LNG equivalent was assessed at $12.71/MMBtu, down from $13.16.