Energy Market Update - 27 March 2025
Energy markets experienced a largely bearish session, with UK and European gas prices declining amid warmer weather forecasts, increased renewable generation, and a lack of significant bullish geopolitical developments. Power markets followed suit, pressured by weaker gas prices and a downward trend in carbon.
In the natural gas market, NBP and TTF front-month contracts eased, with NBP settling at 99.00p/therm (from 100.78p) and TTF at €40.87/MWh (from €41.56/MWh). Market sentiment was weighed down by above-seasonal temperatures expected until early April, reducing heating demand. Additionally, an increase in forecasted wind generation across Europe further pressured near-term gas contracts. Norwegian gas flows were stable, with a nomination level at 325 mcm/day, while LNG arrivals into the UK were reported at five vessels due over the next two weeks, up from four. European gas storage levels stood at 33.72% full, slightly down from the previous day’s 33.91%.
UK power prices tracked the weakness in gas, with the front-month baseload contract settling at £87/MWh (from £88/MWh), and the front-season contract at £83/MWh (from £85/MWh). A stronger renewable generation outlook, particularly wind and solar, contributed to the downward price movement. Warmer temperatures across North-West Europe for early April are expected to keep power demand subdued, while healthy French nuclear output added further pressure to prices. The UK Carbon market also softened, weighing on power contracts further along the curve.
In other commodities, Brent crude oil edged higher to $74/bbl (from $73/bbl) on ongoing supply concerns linked to potential Venezuelan tariff adjustments by the US government. European carbon prices saw slight gains, with EUA December 2025 contracts trading at €71/t (from €70/t). Henry Hub natural gas traded at $3.86/MMBtu, while Asian LNG (JKM) held at $13.20/MMBtu. European coal prices firmed, with the ARA CIF Cal-26 contract settling at $105.46/tonne.
Geopolitical developments remain in focus, particularly the ongoing Russia-Ukraine negotiations. While reports indicate a partial ceasefire agreement, both sides continue to claim violations. Discussions on safe passage in the Black Sea remain contentious, with Europe and Ukraine pushing back against proposals linked to easing sanctions. Uncertainty over the trajectory of these negotiations continues to influence energy markets.