Gas Market
Wednesday sessions saw volatility in the gas market as the new front-month NBP June contract traded within a range of 3.86p, reaching an intraday high of 79.6p/therm before settling up 0.82p at 77.93p/therm. This minor rebound halted a run of losses that has brought the June contract down below 78p for the first time since April of 2024. Gains further along the curve were more pronounced, with the Winter 2026 contract climbing 1.82p to close at 82.73p/therm. Increases along the forward curve, combined with lower wind generation, fed into higher prompt prices, with the day-ahead contract rising by 1.05p to 77.2p/therm. However, further gains were capped by warmer temperatures across Europe and the UK, which reduced gas-for-power demand, along with a stable supply picture and no reports of unplanned outages.
Power Market
The minor rebound in gas prices fed into similar increase in GB baseload contracts. On its final day of trading, the May contract increased £0.13 to settle at £71.25 per MWh. Low wind generation well below seasonal norms at 7.3GW yesterday fed into increased gas for power demand. Warmer temperatures and increased solar generation helped to limit further increases.
Carbon markets experience a similar bounce as selling activity was muted in anticipation of another bank holiday weekend. The carbon EUA Dec 25 contract increased €1.88 per tonne or 2.9% to €66.80
Oil Market
Oil prices continued their fall on Wednesday, marking the largest monthly drop in over three years, after Saudi Arabia signalled plans to increase production and expand its market share. At the same time, the concerns surrounding escalation of a global trade war weighed heavily on the outlook for fuel demand. Brent crude futures declined by $1.13, or 1.76%, to settle at $63.12 per barrel. Over the month of April, Brent dropped by 15%, while WTI fell by 18%, their steepest monthly percentage declines since November 2021. Additionally, data released on Wednesday showed that the U.S. economy contracted at an annualized rate of 0.3% in the first quarter, as businesses responded to the impact of President Donald Trump’s trade war. This contraction signalled a potential decline in future energy demand.
Markets this morning
News that the US and Ukraine have signed an “economic partnership” deal on Wednesday have boosted hopes for an eventual peace deal in Ukraine, leading to declines in gas prices. Near curve NBP contracts are down an average of 1.57p as the deal will further investment in the extraction of Ukraine’s oil and gas resources and may pave the road for further successful negotiations. Oil prices have extended their decline on indications that Saudi Arabia and several other OPEC+ members will increase oil production. This has continued to weigh on prices as Brent crude for July delivery is down $1.06 at $60.00 per barrel.
01 May 2025
