Gas Market
UK gas prices were mostly negative again yesterday, as news of a U.S. brokered deal between Ukraine and Russia to pause attacks at sea and on energy targets initially provided bearish sentiment for the market. The front-month contract declined by 1.78p, settling at 99.00p/therm. However, further declines were limited after reports emerged just hours after the partial ceasefire was announced, with Ukraine and Russia accusing each other of violating the truce. Meanwhile, a stable fundamental outlook, supported by milder weather and increased renewable energy generation, exerted downward pressure on prompt prices. As a result, the day-ahead contract shed 2.20p, closing at 97.60p/therm.
Power Market
GB baseload contracts moved in line with the gas market, with the front-month contract shedding £1.30 to close at £86.40/MWh. Rising temperatures and increased wind generation contributed to sharp declines in prompt prices, as the day-ahead contract fell by £7.35 to £87.15/MWh. Wind output for the rest of the week is forecast to average 13.1 GW, well above the seasonal norm.
Carbon EUA prices remained largely flat throughout Wednesday’s session, with the 2025 contract hovering around €70.00 per tonne. However, the expiration of the March contract triggered a minor rally late in the session, pushing the 2025 contract up by 43c to settle at €70.79 per tonne.
Oil Market
Oil prices rose on Wednesday, driven by government data showing a decline in U.S. crude oil and fuel inventories last week, as well as growing concerns over tighter global supply following the U.S. threat of tariffs on countries purchasing Venezuelan crude. U.S. crude oil inventories fell by 3.3 million barrels last week compared with an estimated draw of 956,000 barrels. Brent crude’s front-month contract gained 77 cents, or 1.05%, reaching $73.79 per barrel. However, gains were limited after the U.S. brokered agreements with Ukraine and Russia to pause attacks at sea and on energy infrastructure, with Washington pledging to push for the removal of certain sanctions against Moscow. Within hours of the announcement, both Russia and Ukraine each accused one another of breaching the agreement.
Markets this morning
Rhetoric from Moscow and Kyiv has cast doubt on the planned ceasefire in the Black Sea. In response, NBP prices have increased, with near-curve contracts gaining an average of 1.50 pence per therm. Prompt prices have yet to trade at the time of writing, though milder temperatures and strong wind generation are expected counter the upward movement on the near curve. Oil prices have remained steady, with the front-month contract slipping slightly by 13 cents to $73.66 per barrel as the market evaluates the impact of new U.S. tariffs on imported cars and Venezuelan crude exports.
27 March 2025
