Energy Market Update - 19 March 2025
Energy markets reacted cautiously to the much-anticipated call between Presidents Trump and Putin, which lasted 90 minutes but delivered an underwhelming outcome. A temporary 30-day halt on energy infrastructure attacks was announced, but conditions attached to the deal left traders uncertain, and initial market optimism faded. Gas and power prices saw an initial dip but have since rebounded.
European gas prices declined slightly in anticipation of the US-Russia call but reversed course this morning. The TTF front-month contract settled at €40.76/MWh, down from €41.25, while NBP front-month closed at 100.01p/therm, down from 100.94p. However, morning trading saw the TTF front-month rise to €42/MWh. Norwegian gas flows were nominated at 319mcm/day, slightly up from 312mcm, despite an unplanned outage at Asgard. European storage levels continued to fall, now at 34.53%. A tightening supply outlook and reports of delayed LNG arrivals in the UK contributed to the morning rally.
UK power prices tracked gas movements, with the front-month baseload contract settling at £87/MWh, up from £86, and the front-season holding at £82/MWh. The spot market saw a notable jump, with UK baseload reaching £100/MWh from £94 due to lower wind generation forecasts, which are expected to average 8.5GW for the rest of the week. Gas-fired generation is set to cover more than half of UK demand today, lending further support to power prices. European markets saw similar trends, with German spot power at €108.30/MWh and French prices at €45.76/MWh.
In broader commodity markets, Brent crude remained steady at $71/bbl, while EU carbon allowances (EUAs) edged up to €71 from €70. US Henry Hub gas climbed slightly to $4.05/MMBtu, while the Asian LNG JKM benchmark eased to $13.11/MMBtu. Coal prices dipped, with the ARA CIF Cal-26 contract settling at $101.60/tonne. Currency movements showed GBP/EUR at 1.1880 and GBP/USD at 1.3000, reflecting minor fluctuations in forex markets.
Market participants will continue to monitor geopolitical developments, particularly any further reactions to the US-Russia discussions, as well as weather forecasts that may influence short-term demand trends.