Energy Market Update - 25 February 2025
Energy markets remained largely stable, with natural gas prices posting modest gains amid strong LNG supply and ongoing concerns over European storage levels. Power prices edged higher, supported by lower wind generation forecasts.
European gas markets saw a slight increase in prices, with the UK NBP front-month contract settling at 112.41p/therm, up 1.91p. The TTF front-month contract remained flat at €47/MWh. Norwegian gas flows to the UK were stable at 329mcm/day despite an unplanned outage at Skarv. LNG supply remains strong, with 13 vessels expected to arrive in the UK over the coming weeks, ensuring ample availability. European gas storage stands at 40.6%, significantly lower than levels recorded in previous years, raising concerns about replenishment ahead of next winter. Market participants are closely monitoring potential policy shifts on gas storage mandates across Europe.
UK power contracts gained across the curve, with the exception of Summer 2027, which saw slight losses. The front-month baseload contract rose to £94/MWh, while the front-season contract dipped to £84/MWh. Spot prices increased sharply to £97/MWh, supported by lower-than-expected wind output. Forecasts now show front-week wind generation at 11.2GW, a downward revision of 4.1GW, though still slightly above seasonal norms. Reduced renewable output has led to higher reliance on gas-fired power generation, contributing to upward pressure on prices.
Brent crude rose to $75/bbl, supported by fresh US sanctions on Iran, while coal prices edged higher, with the 2026 contract at $108.50/tonne. European carbon prices remained steady at €74/t. LNG prices were mixed, with JKM at $14.34/MMBtu and Henry Hub declining to $3.99/MMBtu. Market focus remains on OPEC+ policy, with speculation on whether planned production cuts will be eased in April.
Energy markets continue to balance strong LNG inflows, storage concerns, and weather-driven demand fluctuations, with geopolitical developments remaining a key influence on price direction.