Energy Market Update - 10 April 2025
Energy prices opened higher this morning following a sharp rebound from yesterday’s close, driven by the US government’s decision to pause new global tariffs for 90 days, except for those on China. Market sentiment improved across the board, while European storage policies and Chinese LNG re-exports influenced supply outlooks.
Natural gas prices displayed a mixed trend over the past two sessions, initially declining before bouncing back on fresh trade policy news. On Wednesday, the UK’s NBP Day-Ahead contract closed lower at 82.75p/therm, down 4.45p, while the May front-month shed 5.54p to 83.21p/therm. A key driver was bearish sentiment from falling demand forecasts and stock market weakness—exemplified by a 10.9% drop in the FTSE 100 since the US tariff announcements. Demand across Europe is forecast to remain below seasonal norms until at least 23 April due to warmer weather and strong solar output, while EU gas storage rose modestly to 34.97% full.
However, market direction reversed early today, with NBP May trading at 86.92p/therm and TTF at €35.55/MWh. This rebound followed news that the US would delay its proposed global tariffs except on China, which now faces a 125% tariff rate. In response, China has begun re-exporting surplus US LNG into Europe due to low domestic demand and higher European prices. Additionally, the EU is considering making its 90% gas storage target more flexible for winter 2025, potentially allowing up to 10% deviation or extending the deadline beyond 1 November.
In the power market, UK baseload prices followed gas lower on Wednesday before rebounding. The UK Day-Ahead baseload fell to £82.49/MWh, down £0.62, while forward contracts showed broader declines. The May contract dropped £2.75 to £69.55/MWh and Q3 2025 declined by £3.50 to £72.68/MWh. However, this morning’s opening saw gains, with May delivery now offered at £75.11/MWh.
The German government also introduced new policy proposals aimed at reducing industrial power costs, including tax reductions, grid fee cuts, and capped industrial power prices. Meanwhile, the UK power system reported increased gas-fired output and strong interconnector flows. Wind and solar forecasts indicate above-average output into next week, likely moderating power prices.
In wider commodities, Brent crude climbed to $65.48/bbl after regaining $2.66 overnight. The recovery followed the US tariff delay, although prices remain well below early-April levels when Brent was over $74/bbl. The ongoing US-China trade dispute continues to cast uncertainty over oil demand and pricing.
European carbon prices weakened, with EUA December 2025 contracts falling to €60.94/tonne, down €1.12, as industrial demand forecasts remained soft. UK carbon prices followed a similar path, with the UK ETS contract slipping to £41.18/tonne. Coal prices also dipped, with ARA CIF Cal-26 contracts settling at $106.64/tonne, reflecting weaker global demand and a bearish sentiment across the wider energy complex.