Energy Market Update - 28 March 2025
Energy markets saw relatively muted activity yesterday as traders assessed conflicting geopolitical signals. European natural gas prices posted small gains, while UK power prices exhibited minor movements. Oil and carbon markets remained steady.
Natural gas prices in Europe edged higher, with the TTF front-month contract settling at €41.20/MWh, up from €40.87, and the UK NBP front-month rising to 99.35p/therm from 99.00p. Reports of further damage at the Sudzha gas transit point in Ukraine heightened concerns over the viability of a ceasefire, contributing to some market uncertainty. Speculation continues around the possibility of Russian gas transiting through Ukraine or the Nord Stream pipelines, though European resistance to reintroducing Russian gas remains strong.
Norwegian gas flows were slightly lower at 327mcm/day due to an unplanned outage at the Karsto processing plant, adding to short-term supply risks. Meanwhile, European gas storage levels stood at 33.62%, with withdrawals slowing as the market shifts focus toward summer injections. Warmer-than-seasonal temperatures in the coming week are expected to limit short-term gas demand, though forecasts indicate potential cooler conditions in mid-April.
UK power prices saw marginal adjustments, with the front-month baseload contract settling at £86/MWh, down from £87, while the front-season contract remained unchanged at £83/MWh. Wind generation has been above seasonal norms, reducing reliance on gas-fired power generation.
However, forecasts suggest a drop in wind output next week, which could lead to increased gas demand for power. A decline in interconnector imports from Europe also contributed to minor price fluctuations, though overall market sentiment remained stable.
In broader energy markets, Brent crude settled at $74.03/bbl, maintaining its recent levels as traders weighed potential US tariffs on Venezuelan oil buyers against ongoing supply concerns. European carbon prices slipped, with EUA December 2025 contracts closing at €69, down from €71, amid weaker industrial demand signals.
Meanwhile, coal prices strengthened slightly, with the ARA CIF Cal-26 contract rising to $107.12/tonne. The LNG market remained active, with four cargoes expected to arrive in the UK in the coming weeks, maintaining a steady supply outlook.