Gas Market
Gas prices were mixed on Wednesday as the EU’s proposal to phase out Russian fossil fuels by 2027 tightened the supply outlook, while lingering U.S.-China trade tensions continued to weigh on demand expectations. Market participants are closely watching the outcome of this weekend’s trade talks, though a major breakthrough or full tariff rollback remains unlikely. The front-month NBP contract gave up early gains, falling 0.71p to settle at 83.07p/therm. Prices found some support from the EU’s strategy to reduce reliance on Russian gas, which made up 19% of the bloc’s imports in 2024. To compensate for reduced Russian supply, the EU plans to boost U.S. LNG imports and scale up domestic renewable energy generation. On the prompt, prices were rangebound as lower renewable generation was offset by an expected increase in Norwegian flows following the restart of the Kollnes facility tomorrow.
Power Market
GB Baseload futures were mixed yesterday as futures contracts gave up early morning gains to settle within 0.5% of their previous close. The front month shed £0.40 to £76.00/MWh while Winter 25 climbed £0.20 to £83.80/MWh. Prices on the prompt were slightly more pronounced with an increase of £0.85, or 1.01%, to £85.10/MWh as low wind generation and lower than average temperatures were at odds with a healthy supply picture.
EU carbon allowance prices rose for a second day, overcoming a key resistance level of €70 per tonne and setting a six-week high while UKAs extended their recent gains to set a new 18-month high for the rolling front-year contract. The 2025 EUA contract climbed €1.58 to €71.13 per tonne while the UKA contract reached £52.00 per tonne, up 2.1% on yesterday’s close.
Oil Market
Oil prices fell by more than $1 on Wednesday, retreating after a brief rebound from a sharp sell-off earlier in the week. Investors are now turning their attention to upcoming U.S.-China trade talks scheduled for this weekend. Both Brent and WTI benchmarks plunged to four-year lows earlier this week after OPEC+ announced plans to accelerate output increases. This move has raised fears of a supply glut, especially at a time when heightened U.S. tariffs are deepening concerns about weakening global demand. Optimism for a breakthrough in the trade talks remains low, as tariffs on goods traded between the two countries have soared to over 100% in recent weeks. These tensions continue to weigh heavily on the global economic outlook and energy demand. The July Brent crude contract shed $1.03, or approximately 1.66%, to settle at $61.12 per barrel.
Markets this morning
Energy prices are up this morning as positive sentiment surrounding the US China trade talks is buoying optimism for an increased demand outlook. The front month gas NBP contract is up 2.13pat 85.20p/therm while Winter 25 is up 1.86p at 95p/therm. Activity on the prompt is less active with the day-ahead and within day contracts yet to trade although a healthier supply picture with an increase in Norwegian flows is expected to be price suppressive. Oil prices are up close to 1% so far this morning, similarly, supported by the optimism from the trade talks.
Yesterday in Summary
Gas and power markets were mixed on Wednesday, with prices responding to a blend of geopolitical and supply-side factors. The front-month NBP contract edged down 0.71p to 83.07p/therm, as the EU’s proposal to phase out Russian fossil fuels by 2027 supported the supply outlook, while concerns over ongoing U.S.-China trade tensions weighed on demand sentiment. Meanwhile, oil prices declined by over $1, with Brent crude settling at $61.12/bbl and EU carbon prices broke through €70.00 to a six-week high, with the 2025 EUA contract up €1.58 at €71.13 per tonne.
08 May 2025
