April Markets Update

European spot and near curve gas prices were bullish in early March, in response to the drop in temperatures below seasonal norms. Gas prices saw further support towards the end of the month as a result of the blockage of the Suez Canal and the potential impact on LNG supply.
The annual forward average gas price closed at 49.87ppt on 31st March, compared to 42.48ppt on 1st March.

Commercial power prices have risen this month, following gas trends, with the annual forward average price closing at £60.09/MWh on the 31st March; a significant increase from £53.68/MWh at the beginning of the month.
Power markets saw a lot of support across early March stemming from cold temperatures and poor renewable output. However, this alleviated slightly towards the end of the month as European power spot prices faced downward pressure from above-average temperatures which weakened power demand.

With OPEC members agreeing to gradually increase oil production from May onwards, oil prices are predicted to rise as hopes improve that oil demand will continue to grow over the summer months.
As of 31st March, Brent Crude oil was trading at $64.14/bbl. This is a slight drop from $67/bbl at the end of February, though is expected to rise throughout the coming months.

Global coal production is estimated to have declined by 2% in 2020 due to COVID-19-related lockdowns and restrictions. However, according to this study, Global coal production is predicted to grow at a compound annual growth rate of 2.3% between 2021-2025 to reach 8.8bnt.
Despite predicted growth, the UK is phasing out coal faster than any other G20 nation, accounting for just 1.7% of all electricity generated in the UK (a 93% decrease since 2015).