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Welcome to the April edition of our energy market insight.

Markets have been more stable in the lead up to the Easter period, although with the ongoing war in Ukraine it should be noted that “stable” is a relative term. In this month’s market narrative, we look at the latest price drivers, speculate regarding what this summer may have in store for the energy sector, and consider one approach to minimising the rate you pay at renewal.

Natural Gas Prices

Since the unprecedented spikes in wholesale gas prices on 7th March, markets settled across the following week and have since hovered in a similar range leading up to the Easter break. The table below shows a latest snapshot of prices just prior to Easter, and the graph tracks season-ahead pricing over the last month:

For eight consecutive days immediately before Easter we saw gas injection into European storage facilities, which now hold around 1.2bcm more than a week prior. UK storage has also seen an increase, with prices being kept in check by the continuation of strong LNG deliveries into Europe. Russian gas flows via Ukraine have also continued to be unaffected by the war, and the combined effect is beginning to soften gas pricing across this summer. However, the very real risk of escalation in Ukraine, or further associated sanctions on Russian gas and oil, is preventing any meaningful downward shift.

A deal was announced on 25th March for the US to deliver LNG to the EU this year, equivalent to around 10% of the volume currently sourced from Russia. This is part of ongoing efforts by the EU to move away from reliance on Russian gas. The EU currently sources around 40% of its gas from Russia. The US deal came only 2 days after a statement from Mr Putin that Russia will continue to sell gas along the lines of previously agreed contracts, but the currency of payment will change to Russian roubles as opposed to euros or dollars. This had caused a reaction on the markets, and Germany announced plans for gas rationing, however a workaround was finally implemented that involved funds being paid via Gazprombank.

Although we have seen a brief period of relative stability, in order for gas prices to show any significant downward movement, it will likely require an end to the war in Ukraine. But prices returning to levels seen in early 2021 seems a far stretch from where we are today.

Power Prices

As per usual, power prices have continued to follow where natural gas prices have led. This table gives a market snapshot just prior to the Easter weekend:

As normal, trading was very thin around the long Easter weekend, and little change to the news cycle meant prices held in a similar range. As per the above commentary on gas prices, the markets remain focused on updates from Ukraine.

UK temperatures were re-forecast upwards this week to 3°C above seasonal norms, which would usually lower market on prices. However, this is expected to be countered by reduced wind generation, which will be around 20% below average for April and therefore increase the gas for power demand.


Nobody can say with any certainty where energy markets will be a year from now. As per the pricing tables above, Winter-22 contracts continue to trade at a significant premium to 2023 prices. Some business energy consumers appear content to limit the impact of price increases this year by signing longer-term contracts, thereby lowering the overall commodity component of their delivered price. But others believe markets must fall in the medium/long-term and therefore don’t wish to be tied in for longer than necessary when prices are recovering from record highs.

Either way, there is still value to be found by a purchaser who is able to respond quickly to any small downward market movements, with savings in the tens of thousands often being found by those who can make quick decisions when opportunity presents itself. In a volatile market, quick decision making is key, although we recognise this can prove challenging when prices are currently far from palatable.


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