Gas Market
Ongoing trade war uncertainty continues to weigh on global demand, with NBP curve contracts falling alongside the prompt. The spillover effects of the U.S.-China trade war have led ICIS to lower its forecast for China’s 2025 LNG demand by 6 million tonnes, potentially easing Chinese competition for LNG cargoes this year. Any further escalation in tariffs could place additional pressure on economic activity and reduce China’s gas imports throughout the year. Front-month NBP for May declined by 3.28p to close at 83.99p/therm, while Winter 2025 shed 3.87p to 92.59p/therm. Warmer weather and declines across the forward curve fed into prompt pricing, with the day-ahead contract slipping 1.75p to settle at 83.75p/therm.
Power Market
GB baseload forward contracts fell along with gas prices as trade war escalation between the US and China continued to weigh on global expected energy demand. Front month May declined £1.90 to £73.55/MWh. Prices were elevated on the prompt as weaker wind and solar generation supported a gain of £3.75 on the day-ahead to £88.80/MWh. Wind output for the rest of the week is forecast to average 15% below normal at 6.7GW.
European carbon prices opened the week lower, with the EUA Dec-25 contract falling €1.53 to €64.25 per tonne, a 2.3% loss, driven by bearish sentiment in the gas market.
Oil Market
Oil prices were mixed over the bank holiday weekend. Brent crude fell sharply by more than 2% on Monday, following a steep sell-off in equity markets triggered by U.S. President Donald Trump’s criticism of Federal Reserve Chair Jerome Powell. Trump repeatedly criticized Powell for refusing to cut interest rates but has since softened his rhetoric after unsettling the stock market and driving front-month Brent down to $66.26 per barrel. However, Brent rebounded on Tuesday, rising $1.18 to settle at $67.44 per barrel, amid signs of a potential de-escalation in U.S.-China trade tensions. Ongoing trade disputes, particularly between Washington and Beijing, along with broad U.S. tariffs, have continued to weigh on oil prices in recent weeks, as investors grow increasingly concerned about a global economic slowdown and its impact on demand.
Markets this morning
Gas markets opened higher this morning following reports that the EU is considering legislation to ban companies within the bloc from signing new contracts for Russian fossil fuels. Front-month NBP rose by 1.01p to 85.00p/therm.
Meanwhile, oil prices climbed over 1% as investors reacted to a combination of factors, including new U.S. sanctions on Iran, a decline in U.S. crude inventories, and a softer tone from President Trump regarding both the Federal Reserve and his trade war with China. Brent for June delivery has dropped off an intraday high of $68.65, its highest price since April 4, to $65.50 per barrel.
