Energy Market Update - 31 March 2025
Energy markets opened the week with modest gains, driven by geopolitical uncertainty and colder weather forecasts. European gas and power prices edged higher, while oil and carbon markets remained relatively stable.
Natural gas markets saw slight upward movement, with the TTF front-month contract settling at €40.82/MWh on Friday before opening at €41/MWh this morning. The UK NBP front-month contract similarly ticked up to 99p/therm from its previous close at 98.55p. The market remains focused on geopolitical tensions, particularly ongoing peace talks between Russia and Ukraine. President Trump has expressed frustration over the lack of progress, threatening tariffs on Russian oil as leverage. Despite warmer weather reducing demand last week, forecasts indicate a return to colder temperatures across Europe, especially in Germany, where conditions could dip 4-5 degrees below seasonal norms. Norwegian gas flows were steady at 328mcm, while European gas storage was reported at 33.69% full, significantly lower than last year’s 58.9% at this time. LNG arrivals into the UK remain stable, with four cargoes expected over the coming weeks.
In the UK power market, front-month baseload settled at £85/MWh, slightly down from £86/MWh on Friday. However, the front-season contract saw a notable increase to £89/MWh from £83/MWh. Spot power prices surged to £96/MWh, up from £70/MWh, reflecting lower wind generation and increased reliance on gas-fired power. Wind speeds in the UK remain below seasonal norms, contributing to higher thermal generation demand. Additionally, forecasts suggest continued volatility in renewable output, with a temporary improvement later this week before another dip next week.
Brent crude remained flat at $74/bbl as traders weighed potential US sanctions on Russian oil exports. The ongoing ceasefire between Russia and Ukraine remains fragile, with reports of damage to Naftogaz infrastructure despite diplomatic efforts. European carbon markets held steady, with EUA December 2025 contracts at €69/tCO2, reflecting mixed signals from industrial output forecasts and energy policy discussions. Meanwhile, coal prices in Europe rose slightly, with the ARA CIF contract for 2026 delivery settling at $108.33/tonne, up from $107.12.