UK natural gas prices fell in April 2017, with the Jun-17 contract falling 4.7% and the Winter-17 contract dropping 1.7% amid strong supply from UKCS and Norway, healthy LNG supply, relatively low demand thanks to mild weather and weaker crude oil prices. The electricity baseload counterpart contracts followed UK natural gas prices down, with the Jun-17 losing 5.2% and the Winter-17 ending the month 1.1% lower pressured by strong UK wind turbine output, mild weather, weaker coal and carbon prices. A strengthening of the GB pound (1.5% versus the Euro) lent further support to later dated contracts, dissuading Continental traders from purchasing more expensive UK energy contracts. However April saw minor gains in Asian LNG prices (1.8%) amid tightening production. The month-ahead Brent crude oil contract fell 2.6% amid signs of falling U.S. gasoline demand (down 2.4% in February), global crude oil glut and increasing U.S. oil production, which has been offsetting production cuts led by OPEC, despite geopolitical tensions flaring in Syria and disruption of Libyan output. U.S. drillers added 35 oil rigs in April, while total U.S. crude oil stocks fell by 7.8 mbbls. Coal prices fell by 0.9% as operations began to resume in cyclone-affected areas of Australia and as Russia’s coal exports are expected to rise by 3.3% in 2017. The UK had its first full 24 hours of coal-free electricity generation on Friday 21 April. The share of electricity generated from coal decreased to 9.1% in 2016, while UK renewable sources dropped to 24.4% and electricity generated from natural gas increased to 42.4%. Carbon emission prices fell by 6.2%, following falling European electricity prices amid high German renewable output. Last month, we predicted UK energy prices to rise early in the month and then come under pressure later in the month, erasing gains and settling below the starting levels. Although prices did rise early in the month, they didn’t push as high as anticipated, but managed to fall within our range of expectations for the end of the month (UK natural gas Jun-17 was expected to fall to 38.06 p/th and ended at 38.16 p/th, while Win-17 was projected to settle at 45.34 p/th and ended at 45.85 p/th). We foresee prices pushing lower early in May, but later lifting or trading sideways for the rest of the month for a net fall of 3-8%.