Energy Market Update - 14 April 2025
Energy prices firmed slightly across gas and power markets, supported by financial market recovery and supply risks, while ongoing geopolitical tensions and tariff developments continued to weigh on broader sentiment.
Natural gas prices at the UK NBP gained modestly on Friday, with most curve contracts posting increases of around 1p/therm. The front-month settled at 83.10p/therm, up from 82.18p, and day-ahead prices rose to 82.50p/therm. This follows a week of volatility tied to geopolitical uncertainty, notably the escalating US-China trade tensions. The imposition of retaliatory tariffs—145% on Chinese goods entering the US and 125% on US imports to China—has led to expectations of slower global economic growth and weaker LNG demand in Asia. As a result, shippers may increasingly divert US LNG to Europe to avoid Chinese tariffs, adding to regional supply and pressuring prices. European gas storages remain well stocked at 35.08%, though some EU member states have proposed easing storage targets from 90% to 80%. Warm weather across Northwest Europe, particularly Germany, has also dampened heating demand. Despite minor supply-side concerns from unplanned outages in Norway, and a slightly long UK system at 160.19 mcm, flows from LNG remain stable with multiple cargoes scheduled to arrive in the coming days.
UK power prices largely tracked gas market movements, with the day-ahead baseload price falling to £74.44/MWh, down from £81.51. Forward contracts firmed slightly, with May 2025 up £1.40 to £71.60/MWh and Winter 2025 gaining £2.52 to £82.71/MWh. The power generation mix has seen steady gas-fired generation amid choppy wind output. While solar output remained robust due to clear skies, wind forecasts indicate variability in the short term, though a spike is expected mid-week which could temporarily reduce gas-for-power demand. In Germany, reports emerged that the incoming coalition government is planning a major expansion of gas-fired power capacity by 2030 to curb electricity costs. This policy shift, if confirmed, could have longer-term implications for European gas and power demand. UK nuclear availability remains reduced due to ongoing maintenance, including multiple outages at the Heysham and Torness stations, tightening system margins.
In broader commodity markets, oil prices edged higher following gains in financial indices, with Brent crude climbing $1.43 to $64.76/bbl and WTI reaching $61.50/bbl. The price recovery came despite the lingering pressure from trade disputes, particularly affecting automotive and steel sectors in Europe. Meanwhile, European carbon prices advanced, with EUA December 2025 contracts rising to €64.82/tonne, up €2.70, and UK ETS credits also strengthening. The bullish movement was influenced by stronger financial sentiment and lower forecast emissions due to mild weather. Coal prices in Europe showed limited movement but remained firm, with the ARA CIF Cal-26 contract at $107.92/tonne, reflecting ongoing demand stability despite low generation usage in the UK.