Energy Market Update - 11 April 2025
Energy markets were largely subdued with minor declines in gas and power contracts across the curve. Improved Norwegian flows, rising wind forecasts, and ongoing geopolitical uncertainties contributed to the cautious tone.
UK natural gas prices posted small losses across the curve on Thursday. The day-ahead NBP contract dropped to 81.35p/therm, while front-month May settled at 82.18p/therm, down by 1.03p on the day. The market was weighed by a recovery in Norwegian flows, with nominations to the Easington terminal rising to 62mcm, up from just 15.2mcm earlier this month, as early maintenance winds down. However, a new unplanned outage at Aasta Hansteen has curtailed Norwegian exports by 11mcm/day.
Despite these supply shifts, demand remains well below seasonal norms due to mild weather and robust wind generation, which is encouraging early storage injections across Northwest Europe. Forecasts show demand briefly normalising on 16–17 April before dipping again, likely keeping prices contained. European governments are also nearing approval of new storage regulations allowing more flexibility around filling targets, which may further weigh on price expectations.
Power prices mirrored the bearish gas sentiment, with the UK baseload day-ahead contract falling to £81.51/MWh, from £82.49/MWh previously. Forward prices were mixed, with the May contract gaining slightly to £70.10/MWh but Q3 pricing slipping to £72.28/MWh. Despite lower gas-for-power demand, upcoming nuclear outages are being closely monitored.
Maintenance at Heysham 1 begins today, reducing capacity by 112MW until mid-July, adding potential upward pressure. Wind forecasts are strong for the coming days, particularly in continental Europe, and UK wind output is projected to return to seasonal norms by the end of next week, which could add further downside pressure on power prices. Interconnector flows remained stable, and the overall system opened balanced this morning, suggesting no short-term system stress.
In the wider commodity space, oil prices reversed earlier gains, with Brent crude slipping to $63.33/bbl following renewed tariff escalations between the US and China. The US has raised tariffs on Chinese goods to 145%, with China responding in kind and stating it would not engage further. These moves are fuelling global recession fears, adding downside risk to energy demand outlooks.
European carbon prices edged higher, with the EUA December 2025 contract rising to €62.12/tonne, while UK ETS prices jumped £2.00 to £43.18/tonne, driven by weaker supply expectations and anticipations of tighter future emissions rules. Meanwhile, coal prices were stable, with the ARA CIF Cal-26 contract at $107.41/tonne, supported by relatively steady demand expectations across European power markets. LNG markets were quiet, though Northwest Europe expects several cargoes from the US, Nigeria, and Qatar over the next week, which may ease supply concerns.