Energy Market Update - 17 March 2025
Energy markets remained largely rangebound on Friday, with gas and power prices edging higher amid ongoing geopolitical uncertainty and storage policy discussions. Despite market hopes for progress in ceasefire negotiations, no resolution has been reached, keeping traders cautious.
European gas prices fluctuated within a tight range, with the TTF front-month contract settling at €42.29/MWh, slightly up from €42.08/MWh. UK NBP front-month gas closed at 103.89p/therm, up from 102.99p/therm. Market focus remains on EU gas storage targets, as speculation grows over potential adjustments to the current 90% fill requirement by 1 November. Proposals under discussion could introduce flexibility, allowing the target to be reached between 1 October and 1 December to mitigate price manipulation risks. Meanwhile, storage levels have declined to 35.01% full, down from 35.89%. Norwegian gas flows to the UK were stable at 333 mcm/day, and LNG supply remains robust, with eight cargoes expected in the coming weeks, down from eleven previously.
UK power prices followed gas higher, with the front-month baseload contract closing at £88/MWh, up from £84/MWh, while the front-season contract moved to £84/MWh from £83/MWh. Wind generation across northwest Europe is forecast to be around 80% of seasonal norms, contributing to power price support. However, milder weather expected from midweek could offset some of this bullish sentiment. The UK system opened oversupplied by 6mcm/day this morning, with higher LNG send-out and Norwegian flows keeping supply steady.
Brent crude prices edged up to $71/bbl from $70/bbl as geopolitical tensions continued to shape market sentiment. The US reaffirmed its commitment to targeting Houthi rebels, raising concerns over shipping disruptions through the Red Sea, though most US LNG cargoes bound for Europe do not traverse this route. European carbon prices remained steady at €71/tCO2e, with the EUA Dec-25 contract unchanged. Meanwhile, JKM LNG prices eased to $13.47/MMBtu, down from $13.67/MMBtu, reflecting softer Asian demand.