Energy markets are in decline

The oil price has taken a clear step down this week. On Friday, April 25, the highest point of the week was reached, with a price of $66,87 per barrel. Since then, the oil price has fallen by 5%, to $63,52. With this, the oil price is again approaching the lowest level since 2021, which was reached earlier this month.

The lower energy prices are the result of lower demand caused by the trade war. A recent Reuters poll found that many experts believe it is likely that the global economy will enter a recession later this year. Trade between the United States and China is shrinking rapidly, and that will likely be reflected in oil demand soon. British bank Barclays on Monday cut its oil price forecast by $4, to $70 a barrel.

Meanwhile, U.S. commercial oil inventories rose by 500.000 barrels late last week, data from the U.S. Petroleum Institute (API) showed. This is a sign that demand for oil in the country is starting to decline. At the same time, there are tentative signs that supply is actually increasing. Several members of the oil cartel OPEC+ are proposing to increase oil production in June, three anonymous sources told Reuters. If production does indeed increase, a further drop in oil prices is likely.

The lower oil price puts direct pressure on the diesel price. Since Thursday 25 April, the diesel price has fallen from €119,33 to €117,03.

Nice spring weather puts pressure on gas prices
The gas price fell this week to its lowest level since May 2024. On Thursday 24 April, gas was traded for €33,57 per megawatt hour. Up to and including Tuesday 30 April, the TTF price was under pressure. That day, the gas price fell by 5,4% to €31,86. A slight correction followed on Wednesday 1 May, with the price rising to €32,07 per megawatt hour.

The main reason for the lower prices is the nice weather of the past few days. As the old saying goes 'March stirs its tail' usually follows 'April does what it wants'. This year, however, the weather in April remained remarkably stable and warm. The heating has barely been on these weeks. This has led to considerably lower prices than in March, and this week too the mild weather continued to put pressure on gas prices. In addition, the demand for gas for generating electricity was considerably lower than average this month.

From a security of supply perspective, the warm and sunny weather is a godsend. During the winter of 2024-2025, gas reserves have shrunk significantly. At the end of March, the filling level reached a low of 33,6% – 5 percentage points lower than the average level and as much as 25 percentage points lower than the level of a year earlier. The higher gas demand for electricity generation was mainly due to lower production of renewable energy during the winter months. However, since April, gas storages have been filling faster than average. Between 17 March and 28 April, the filling level increased from 33,6% to 39%, an increase of 5,4 percentage points. By comparison, the filling level increased by an average of 3,7 percentage points during this period. This means that gas stocks were filled approximately 46% faster than usual during these weeks.

Spanish power outage barely affects the Netherlands
The news on the electricity market this week was mainly determined by the large-scale power outage in Spain and Portugal. On Monday 28 April, Spain lost no less than 15 gigawatts of electricity in a few seconds, which corresponds to approximately 60% of the national energy demand. The exact cause of this blackout has not yet been determined. After the outage, the gas-fired power stations were quickly started up to get electricity production going again. The outage has now been resolved.

Although there was a short-term effect of the power outage in Spain on the Dutch electricity grid, the daily prices for electricity remain largely at the expected level. There was some instability on the Dutch high-voltage grid when the power supply in Spain was disconnected. In practice, however, the impact remained limited, as the dip was very short-lived.

Despite the brief moment of grid instability, electricity prices behaved largely as expected this week. In the first three days of the week, prices ranged between €70 and €75 per megawatt hour (MWh). This is significantly lower than a week earlier, when prices fluctuated between around €84 and €110 per MWh. The decline was mainly caused by strong peaks in solar power production, which provided particularly cheap electricity on weekdays. The highest production was measured around 2 p.m., with peaks of around 22,17 gigawatts per hour.