Energy Market Update - 16 April 2025
Energy prices declined yesterday across gas and power markets as mild weather and strong supply conditions persisted across Europe. Geopolitical discussions surrounding Ukraine and increased LNG activity also influenced sentiment.
Natural gas prices in the UK and Europe moved lower, reflecting ample supply and subdued demand. The UK’s NBP day-ahead contract settled at 82.60 p/therm, down from 84.50 p/therm, while the TTF front-month contract traded around €34.80/MWh. The UK system opened slightly undersupplied this morning due to lower LNG send-out and a minor outage at Barrow, although Langeled flows remained robust at approximately 59 mcm/day. Norwegian flows to the continent increased to 334 mcm/day, with no major maintenance scheduled until the end of next week. Warmer-than-average temperatures across Northwest Europe and the UK are contributing to below-seasonal gas consumption. European storage injections are underway, with EU stocks at 43.69% full or 493 TWh. Meanwhile, market participants continue to track diplomatic activity, with reports that Russian and French leaders will meet to discuss the Ukraine conflict. Such talks could signal shifts in geopolitical risk premiums. Additionally, full commercial operations at the Calcasieu Pass LNG terminal in the US added to market confidence in supply resilience.
UK power prices followed gas lower, with the day-ahead baseload contract settling at £65.49/MWh, sharply down from £84.06/MWh. Front-month contracts also fell, with May-25 baseload at £72.35/MWh. High wind generation today has provided strong renewable output, although this is expected to decline later in the week, potentially increasing gas-for-power demand. Solar generation remains robust. The UK’s power mix has seen offshore wind as the leading contributor, supported by mild temperatures which have kept demand in check. Interconnector flows and nuclear outages have had limited impact on pricing direction. In Germany, despite elevated solar output and above-normal temperatures, day-ahead baseload prices reached €95.40/MWh, indicating regional variability in market conditions.
Brent crude futures rose slightly to $65.32/bbl, supported by expectations of ongoing diplomatic tensions and potential supply-side constraints. WTI crude also edged higher to $61.90/bbl. Coal prices continued to firm, with ARA CIF Cal-26 coal trading at $110.53/tonne, reflecting increased demand across Europe. Carbon markets softened slightly, with EUA Dec-25 certificates falling to €66.19/tonne amid stable demand expectations and moderate weather. UK ETS prices edged up to £47.43/tonne. Overall, the wider commodity complex provided a mixed backdrop for energy markets, balancing supply confidence with geopolitical caution.