Energy Market Update - 16 January 2025
Energy markets were relatively stable yesterday, with minor movements observed across most contracts. NBP day-ahead gas prices decreased slightly, settling at 119.50p/therm, while TTF front-month gas rose marginally to €47.01/MWh before retreating this morning to €46/MWh.
Lower nominations from the Norwegian Continental Shelf, particularly due to the ongoing unplanned outage at the Njord gas field, supported spot prices. This outage, reducing capacity by 5.3mcm/day, has been extended to 20 January. Despite this, the UK gas system opened 11mcm/day long this morning, aided by increased imports via the IUK interconnector and robust LNG arrivals, with nine cargoes expected in the coming weeks. European storage withdrawals continued, bringing levels to 64.15%, approximately 14.75% lower year-on-year.
In the UK power market, day-ahead baseload prices fell significantly, settling at £113.00/MWh from £131.83/MWh the previous day. Increased solar and wind generation contributed to reduced gas-for-power demand, though wind output remains forecasted below seasonal norms until 24 January. Nuclear output remains constrained, with 1.8GW offline for maintenance, though 1.2GW is expected to return by month-end. Across Europe, stronger wind generation is anticipated next week, which could further reduce reliance on gas-fired generation.
Looking ahead, energy markets may experience increased volatility as President Trump’s second-term inauguration approaches. Key decisions on US LNG export policies and broader geopolitical actions, including efforts to address the Ukraine conflict, could significantly influence supply and demand dynamics. Additionally, oil prices have climbed to $82.03/bbl, supported by supply concerns and geopolitical risks. Carbon prices also increased, with EUA December 2025 contracts settling at €77.98/tonne.