Energy Market Update - 24 January 2025
European energy markets experienced slight downward movements today, driven by above-seasonal temperatures and strong renewable generation in both the UK and Europe, easing pressure on near-term contracts.
UK and European gas prices softened this morning, with the NBP front month contract trading at 123p/therm and TTF at €48.70/MWh, both lower than earlier this week. High storage withdrawals across Europe have brought storage levels to 57.60%, meeting seasonal demand. Supply from Norway remains constrained due to outages at Karsto and Troll, while strong winds delayed LNG cargo arrivals at UK terminals. However, current LNG stockpiles suggest no immediate risks to supply. On the geopolitical front, Donald Trump pledged to secure LNG exports to Europe, potentially stabilising supply routes despite weather-related export concerns in the US.
UK power prices fell, with the day-ahead contract at £90.82/MWh and the front-month baseload contract trading at £103/MWh. This decline reflects high wind output across the UK, expected to peak above seasonal norms due to Storm Eowyn. Wind generation is forecast to maintain strength into next week but may dip slightly at the start of February, potentially impacting day-ahead pricing. Continental power markets similarly eased, with German and Dutch spot prices at €60.17/MWh and €54.62/MWh, respectively, as temperatures above seasonal averages reduce heating demand.
European gas and power markets remain shaped by weather and geopolitical developments. Mild temperatures across Europe have limited heating demand, while strong wind generation offsets lower flows from Norway. President Trump’s remarks at the World Economic Forum about guaranteeing LNG supply to Europe highlight ongoing efforts to secure stable energy routes amid geopolitical tensions. Meanwhile, EU gas storage targets of 50% fullness by February appear achievable, though the pace of withdrawals will be closely monitored as colder weather may return.
Brent crude oil settled at $78.29/barrel, slightly down, as the market weighs mixed signals from Trump’s call for lower oil prices and his historically bullish stance on interest rates. EU carbon prices (EUA Dec-25) rose to €80.76/tonne, reflecting ongoing commitments to emissions reductions. Coal prices remained steady at $116.43/tonne, while currency movements saw GBP/EUR trading at 1.1839.