Brent fell to its lowest level since August 2021 on Friday as fears of global recession grow

Gas Market

  After the sharp declines on Thursday, the near NBP curve extended losses through Friday as fears of a global recession grew.  The Chinese government announced reciprocal tariffs of 34% on U.S. exports on Friday increasing fears of a global trade war and the global markets contracted for a second day.  Natural gas prices slumped amid concerns of demand destruction and the front month shed 6.63p per therm to settle at 88.75p, the lowest settlement for May since the end of September 2024.  Friday’s decline takes the loss for the front month to just shy of 10.00p. Prompt prices recorded steep declines on the day too as the Spot and Day ahead products yielded 6.63p.  The mild temperatures continued to supress heating demand, but wind generation is forecast to fall off from Sunday.  

Power Market

  GB baseload futures at the front of the curve shed a further 5.8% on Friday after a slump in gas and carbon prices.  The front month baseload contract eased by £4.25/MWh day-on-day taking the decline for the week to £6.25/MWh.  The Winter-25 contract was down £4.50/MWh and settled at £84.00/MWh.  Baseload for Monday bucked the trend for the day settling 23.9% higher as wind generation is forecast to fall below 3GW. Carbon prices tumbled on Friday with EUAs for contracts out to Dec-27 down by 3.8% or €2.60 per tonne on average. UKAs shed £1.51 per tonne as fears of demand destruction spook the markets.      

Oil Market

  The retaliatory tariffs from China on U.S. exports pressured crude oil prices on Friday as Brent slipped to lowest level in almost 4-years.  The Chinese government announced reciprocal tariffs of 34% on U.S. goods on Friday which sent the markets spiralling and sparked fears of a global recession. Brent for June delivery shed $4.56 a barrel to settle at $65.58.  The last time the front month for Brent traded below this range was before the energy-crisis in August 2021. Europe and other nations around the globe are expected announce reciprocal trade duties on U.S. goods in response to Trump’s tariffs later this week. Adding to the downward spiral in prices was the news from earlier in the week that OPEC+ are to increase production by 411,000 barrel per day in May.  

Markets this morning

The stock markets in Asia and Australia have tumbled over night as global recession fears mount amid trade tensions.  Wholesale natural gas prices in the UK have softened on opening and continued to ease.  The latest trade for the front month has gone through at 85.10p which is down 3.65p on Friday’s close.  Similar losses are being witnessed on the months for the remainder of the summer while the Winter-25 contract is down 2.86p at 93.25p.  Trading for the prompt has still to get going, but gas demand is up almost 30% due to poor performance from wind generation.  In the crude oil markets, the June contract for Brent is down $2.28 a barrel at $63.30 a barrel.