Energy Market Update - 02 May 2025
Energy markets held steady on Thursday, with marginal price movements reflecting a balance between stable fundamentals and lingering geopolitical risks. Persistent war uncertainty and constrained supply conditions helped support forward gas and power contracts.
Natural gas prices experienced a slight retreat after midweek gains. The NBP Winter 2025 contract eased to 87.60p/th, losing 0.41p, amid ongoing concerns over Norwegian supply. The unplanned Gullfaks outage and reduced Langeled flows—down by 6.6mcm to 58.6mcm—highlight maintenance-related capacity issues on Gassco’s network. Nonetheless, the UK gas system remained long by 13mcm, supported by robust UKCS output and stable LNG send-out from South Hook and Isle of Grain, totalling 10.2mcm. UK demand stood at 152.96mcm, with linepack increasing by over 11mcm. Spot prices declined to 75.65p/th and the NBP June Front Month dipped 0.68p to 77.25p/th. On the continent, TTF Front Month prices settled at €32.15/MWh, with Summer 2025 contracts hovering around 75p/th and Winter 2026 showing limited trading. EU gas storage stood at 39.52%, and concerns are growing that a flat seasonal spread may disincentivise injections unless regulatory intervention is enacted.
Power markets followed the gas trend, with minor fluctuations in contract pricing. UK Day-Ahead baseload increased slightly to £75.82/MWh, while the June Front Month dropped by 20p to £71.00/MWh, reflecting marginal oversupply. Summer 2025 held at £72.64/MWh, and Winter 2025 eased to £79.63/MWh. Comfortable system margins were bolstered by high nuclear availability and muted wind output. Looking ahead, forecasts suggest lower wind generation in the UK and Germany, although France is expected to maintain high output from both wind and nuclear sources. Interconnectors, particularly from France, are keeping imports stable. UKA prices increased to £47.96/tCO2, further closing the gap with EUAs at €67.02/t. This narrowing is attributed to expectations of formal alignment between the UK and EU carbon schemes, ahead of the 19 May summit—a potential turning point for cross-border carbon and energy markets.
In the wider commodity complex, Brent crude edged up to $62.13/bbl amid renewed geopolitical and economic evaluations. Despite discussions around fresh sanctions on Iranian crude and mixed US macro data, the oil market remains broadly supplied, with a weaker forward curve into summer. LNG prices continued to soften, with the Asian JKM benchmark falling to $10.78/MMBtu and European spot LNG declining to $10.65/MMBtu. The UK is seeing low regas nominations and only one LNG cargo scheduled for early May, highlighting reliance on interconnector imports and European LNG flexibility.