Energy Market Update - 11 March 2025
Energy markets continued their upward movement, with European gas and UK power prices strengthening due to geopolitical uncertainty and colder weather forecasts. Norwegian supply disruptions and ongoing diplomatic negotiations in Saudi Arabia contributed to market volatility.
Natural gas prices rose, with the UK NBP front-month contract settling at 100.81p/therm, up from 97.70p, while the TTF front-month increased to €41.23/MWh from €39.97. The market responded to geopolitical tensions as Ukraine and Russia continued their attacks near critical infrastructure, raising concerns about supply risks. The peace talks between US and Ukrainian officials in Saudi Arabia remain a focal point, with traders watching for potential implications on European gas supply. Norwegian flows were impacted by an unplanned outage at Asgard, reducing total flow nominations to 321 mcm/day, down from 329 mcm. European gas storage levels stood at 36.67% full, slightly lower than the previous day. The UK system opened slightly oversupplied, with strong LNG send-out at 63 mcm/day.
Power prices followed gas, with the UK baseload front-month contract rising to £83/MWh from £81 and the front-season increasing to £80/MWh from £77. The UK spot price climbed to £92/MWh from £86. Lower renewable generation forecasts, particularly in wind power, contributed to gains in the near-term market. The UK continued to rely on gas-fired generation, with CCGT output remaining strong amid lower nuclear availability due to planned maintenance at Torness and Heysham plants. Interconnector flows remained stable, with Norway-UK capacity limited by the ongoing outage at Asgard.
In other markets, Brent crude oil declined to $69.28/bbl from $70.51, reflecting broader market concerns over demand. European carbon prices were stable, with EUA December 2025 contracts at €69.01. Coal prices edged higher, with the ARA CIF Cal-26 contract at $106.27/tonne, driven by strong Asian demand and supply concerns in key exporting regions. The currency market saw minor movements, with GBP/EUR at 1.1926 and GBP/USD at 1.2874.
Market participants remain focused on the geopolitical landscape and supply fundamentals, with ongoing diplomatic discussions potentially influencing long-term pricing trends.