Energy Market Update - 11 February 2025
Energy markets showed mixed movements, with spot gas and power prices rising due to colder weather and system tightness, while front-month gas contracts edged lower on expectations of warmer temperatures later in the month.
UK NBP day-ahead gas prices rose to 145.30p/therm, reflecting system tightness driven by colder weather and increased gas-for-power demand. However, the NBP March-25 contract declined to 141.25p/therm, down 1.58p from the previous session, and the TTF March-25 contract fell to €57.40/MWh, indicating confidence in upcoming warmer weather.
European storage levels remain a concern, with overall reserves below 50% capacity, further supporting market sentiment. Norwegian flows have been stable at 329mcm/day, despite an unplanned outage at the Oseberg field, which is expected to be resolved shortly. Reports of strikes on Ukrainian energy infrastructure overnight highlight ongoing risks in the region, while gas imports to Ukraine have increased as the country seeks to offset lower storage levels compared to last year.
In the Middle East, tensions have risen following statements from the US president regarding potential military action if Israeli hostages are not released by Hamas, raising concerns over a breakdown in ceasefire talks. The potential resumption of hostilities could increase security risks in the Red Sea, further complicating LNG shipments via the Suez Canal.
UK day-ahead power prices increased to £124.20/MWh, tracking gains in the gas market. Falling wind speeds are expected to increase reliance on gas-fired generation in the short term, adding further support to prices. However, forecasts indicate slightly higher wind generation than previously expected, which may help mitigate some bullish pressure. European power prices also followed gas markets higher, reflecting immediate-term weather risks.
Brent crude edged up to $75.87/bbl amid concerns over potential trade disruptions and news of a possible one-month ban on Russian gasoline exports. Carbon prices also saw an uptick, with EUAs for December 2025 reaching €82.94/tonne. Coal prices remained firm at $114.96/tonne, reflecting ongoing supply constraints. Global markets are also monitoring the impact of potential trade measures by the US, with ongoing speculation over new tariffs that could influence energy demand and supply chains.