Energy Market Report - 02 April 2026
Energy markets whipsawed through mid-week as ceasefire speculation drove heavy selling on Wednesday before a combative overnight address from President Trump reversed sentiment, sending gas and oil sharply higher in early Thursday trade.
Natural Gas
Prompt gas saw dramatic two-way price action. Wednesday's session brought steep losses as traders unwound speculative length around the European financial year-end, with NBP day-ahead settling down nearly 6p at 120.21 p/th and TTF day-ahead falling roughly 5.6% to around €48.15/MWh. UK system demand eased to around 209 mcm/day and is forecast to drop further toward 190 mcm/day by Friday as warmer weather and the Easter break reduce both heating and industrial load. Norwegian pipeline flows remained robust at around 337.5 mcm/day, with 85 mcm/day nominated toward the UK and Langeled throughput increasing to nearly 71 mcm/day. LNG send-out was active, with Dragon resuming deliveries alongside steady output from South Hook. Overnight, however, the picture shifted sharply. Trump's primetime address - calling on allies to secure the Strait of Hormuz and pledging to escalate strikes against Iran - reignited supply-risk concerns around Qatari LNG, with analysts warning that disruption at Ras Laffan could take three to four months to recover and up to 17% of capacity could remain offline for years. NBP May-26 is indicated around 125 p/th this morning, roughly 4.6% above Wednesday's settlement, while TTF is pushing back toward €49/MWh. EU storage stood just above 28% at end-March, with the withdrawal season drawing to a close and injection economics remaining challenging at current prompt levels.
Electricity
UK power tracked the broader complex lower on Wednesday but showed more restraint, anchored by an improving wind and temperature outlook into the Easter weekend. Day-ahead baseload settled at £107.50/MWh, down £5.80, while front-month May-26 base closed at £92.86/MWh - a drop of more than 4% - though morning indications have lifted it back toward £95.75/MWh. Wind output recovered sharply on Wednesday, rising more than 23% day-on-day in the UK, while German wind generation climbed to around 31 GW. Temperatures across north-western Europe are forecast to run well above seasonal norms over the Easter weekend. The nuclear picture is mixed - Heysham 1-1 entered a planned outage on 31 March taking nearly 500 MW offline, and Heysham 2-7 remains on unplanned outage with 545 MW lost. Torness-1 is due to begin a planned outage from mid-April. Clean spark spreads compressed on Wednesday as gas fell and UKAs drifted, but this morning's gas rally will be reopening some of that margin. Win-26 baseload settled at £97.65/MWh but is indicated around £101.75/MWh this morning. If wind delivers as forecast over the weekend, prompt pricing should remain comfortable, though any underperformance alongside the current geopolitical backdrop could see peaks re-widen quickly.
Other Commodities
Crude oil saw its most dramatic moves since the US-Iran conflict began. Brent M+1 settled at $101.16/bbl on Wednesday - a fall of more than $17, briefly dipping below $100/bbl - before climbing back toward $107/bbl this morning following Trump's overnight escalation. WTI settled at $100.12/bbl and is also recovering. Coal weakened in line with the wider complex, with ARA CIF Calendar-27 settling at $125.01/t, down around 5% on the day. Carbon bucked the trend - EUA Dec-26 rose to €74.64/tonne, up €2.13 on the day, while UKA Dec-26 firmed to £42.49/tonne. The carbon gains may reflect auction dynamics and position adjustments, with the wide EUA-UKA spread and linkage discussions remaining a medium-term watchpoint.
Outlook
The market enters the Easter long weekend in an unusually fragile state. Liquidity is thinning rapidly and holding periods are compressing as traders trim risk, meaning any escalation in the Middle East over the break could trigger an outsized reopening move. The underlying physical picture - steady Norwegian flows, active LNG arrivals, improving wind generation, and softening demand - remains broadly comfortable, but it is the geopolitical headline cycle that continues to set the tone. The forward curve has arguably not fully priced the medium-term risk from Qatari LNG disruption, particularly across Winter-26 and beyond, and the rapid back-and-forth from Washington suggests volatility will remain elevated well into Q2. On the demand side, UK gas consumption is expected to fall sharply into Friday, and renewable generation should keep prompt power subdued if forecasts hold. The key risk is a weekend escalation into thin markets with limited capacity to absorb it.