Energy Markets Hold Steady as Summer Delivery Begins

Market Update:

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• Wholesale prices remained relatively flat on Monday, as we now head into the summer season from tomorrow.
• Where there has been trades so far today, they have been lower than yesterday's close.
• Oil prices are little changed today as investors weighed the possibility of Trump ending the Iran war against supply shocks from a prolonged closure of the Straits of Hormuz.
• Oil sits at a little over $113/bbl.
• Iran attacked and set ablaze a fully loaded crude oil tanker off Dubai on Monday, as President Trump warned the U.S. would obliterate Iran's energy plants and oil wells if it does not open the Strait of Hormuz.
• President Trump warned on Monday that the U.S. would obliterate Iran's energy plants and oil wells if Tehran does not open the Strait of Hormuz, after Tehran described U.S. peace proposals as "unrealistic" and fired waves of missiles at Israel.

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NATURAL GAS:
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European gas markets have opened sideways this morning, with any movement slightly favouring the downside.
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Liquidity is expected to be thin on the front month contract, Apr-26 as it expires today. The NBP contract is trading at around 136p/therm ahead of expiry, a climb of 58p/therm since a month ago, highlighting the impact the Iran conflict has had on energy prices.
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The TTF contract is trading at €54/MWh with THE at €55/MWh.
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Tomorrow marks the first day of Sum-26 and eyes will turn to injection rates and Norwegian maintenance as the market looks to take confidence from supply ahead of winter delivery amid the tightness and impacts being felt due to the closure of the Strait of Hormuz.
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European storage is closing winter at just 28% full, with German storage assets at 22%. This is only just behind the levels seen in 2022 marking the need for strong injection.
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Temperatures are showing a choppy picture across Europe, with the UK set for some uncertainty in the coming week. Temperatures will remain above average until Friday before troughing ahead of the weekend. In Germany, temperatures show a strong improvement climbing to 7/8˚C above average come Monday likely to help reduce heating demand.
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The Iran conflict continues to bring bullish headlines to other commodity markets, in particular Oil, with prices pushing over $106 for WTI and Brent trading over $115 with reports overnight claiming that a Kuwaiti oil tanker caught fire whilst fully loaded with barrels of Oil.
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ELECTRICITY:
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Today marks the end of Win-25 delivery with Apr-26, Q2-26 and Sum-26 contracts set to expire as the front contracts later.

The Apr-26 contract will close around the £94/MWh level in the UK, approximately £20/MWh higher than a month ago when it became front month contract. In Germany, the contract has climbed €17/MWh and similar levels across the Netherlands.

In Germany, the Apr-26 contract lost value on Monday, despite higher THE gas prices, as wind generation was increased for the first half of April, pressuring power prices.

Power contracts continue to take direction from the bullish move in gas and other commodities, feeling the pinch in supply from the ongoing Iran conflict as gas and oil products remain tight. Despite spark spreads tightening the requirement for gas generated power remains in place due to its flexibility compared to other sources.

Wind output is forecast to be poor for the working week, with German wind generation falling to just 22.5GW tomorrow, 10GW below seasonal average. The Netherlands will also see a drop in wind generation, falling 1GW below seasonal norms.

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Latest Price:
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Latest Gas & Power Annual Chart:
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