Energy Market Update - 24 March 2025
Energy markets were volatile at the start of the week, with initial price support from geopolitical concerns around the Sudzha metering station fire giving way to softer fundamentals. The market remains focused on upcoming US-Russia-Ukraine talks in Saudi Arabia, while strong LNG arrivals and steady Norwegian flows are keeping supply conditions relatively loose.
Natural gas prices opened with a bullish tone on Monday following reports of a fire at the Sudzha metering station in Russia, but the rally faded as the day progressed. The UK NBP Front Month contract settled at 103.79p/therm, down from 104.33p, while the TTF equivalent closed at €42.61/MWh, slightly lower than the previous session. Norwegian gas flows remained stable, with nominations at 332 mcm/day, supporting supply security. European gas storage levels stand at 33.90%, well below last year’s levels, highlighting the challenge of refilling stocks before winter. Meanwhile, five LNG vessels are expected to arrive in the UK over the next two weeks, slightly down from the previous estimate of six, providing additional supply flexibility.
UK power prices saw a mixed session, with the Day-Ahead baseload contract jumping to £98/MWh from £67/MWh due to a weaker wind forecast for Monday. The UK Front Month Baseload contract slipped to £89/MWh from £91/MWh, while the Front Season contract held steady at £85/MWh. A revised wind generation forecast, increasing expectations by 0.9GW for the coming week, eased some supply concerns. Elsewhere, power market participants continue to monitor developments in European energy policy, particularly in Germany, where debates over long-term energy strategy and industrial competitiveness could impact pricing.
In the broader energy complex, Brent crude held steady at $72.16/bbl, while European carbon prices (EUA Dec-25) declined to €71.45 from €73, reflecting softer demand expectations. Coal prices remained firm, with the ARA CIF Cal-26 contract settling at $103.02/tonne. The Henry Hub natural gas benchmark stood at $3.98/MMBtu, and JKM LNG was at $13.39/MMBtu, maintaining a slight premium over TTF, which settled at a TTF-equivalent of $13.51/MMBtu. The market will continue to watch for signals from Saudi Arabia’s peace talks, which could influence the geopolitical risk premium in energy markets.