Energy Market Report - 05 March 2026
Energy prices pulled back sharply on 4 March after unconfirmed reports of preliminary Iran-US peace contact briefly lifted sentiment, only for Iranian officials to rebut those claims and morning trading on 5 March to recover much of the lost ground. The QatarEnergy force majeure at Ras Laffan remains in force and the conflict enters its sixth day with no diplomatic resolution in sight.
Natural Gas
NBP day-ahead settled at 125.50p/therm on 4 March, down 11.50p on the session, while the front month (Apr-26) gave back 14.11p to settle at 126.88p/therm. Summer-26 eased to 111.77p/therm and Winter-26 to 98.36p/therm, with broader seasonal contracts shedding 11-15p across the board. Early trading on 5 March has partially reversed those moves, with Apr-26 indicated in a range of approximately 128-136p/therm depending on the point of the session, leaving prices roughly double their pre-conflict levels. TTF spot settled at €47.71/MWh on 4 March, with the front month quoted near €52.45/MWh this morning.
The Qatari force majeure continues to define the supply narrative. QatarEnergy halted LNG production at Ras Laffan on 2 March and has indicated that a restart would take at least two weeks following any peace agreement, with a full return to export capacity likely taking longer still. The Qatari carrier Al Kheesah berthed at Milford Haven overnight but cannot return for reloading under current conditions - a concrete illustration of the one-way supply chain dislocation now in play. Iran continues to issue threats against vessels transiting the Strait of Hormuz, which handles approximately one fifth of global LNG trade, keeping a geopolitical risk premium embedded across the curve. The JKM benchmark eased to $19.14/MMBtu from $21.18 the prior session, suggesting some reduction in Asian pull, though the absolute level remains sharply elevated.
The UK physical picture is relatively contained for now, with the system opening 4 mcm long and demand tracking at 214 mcm/day. Norwegian nominations are softer, however, with Langeled at 68.90 mcm/day and Vesterled running at just 2.00 mcm/day. LNG send-out is nominated at 59 mcm/day, led by South Hook at 37.60 mcm/day. Gas-for-power burn is forecast to rise to 43 mcm/day today as wind output falls, up 11 mcm/day on the prior session, adding prompt demand pressure. A sequence of US and Qatari cargoes is expected at Northwest European terminals over 5-6 March, providing some near-term physical relief. The Summer-26/Winter-26 spread inversion - with summer currently trading around 13p/therm above winter on NBP - is a notable signal for procurement planning, implying the market anticipates tighter conditions during the injection season than the subsequent heating period.
Electricity
UK power followed gas lower on the prompt. Day-ahead baseload settled at £116.99/MWh on 4 March, down £4.57 on the session, while the day-ahead peak fell £1.95 to £124.23/MWh. Morning offers on 5 March have firmed toward the low £120s/MWh on baseload. System buy prices reached £145/MWh in early settlement periods today, easing back from £180/MWh on 4 March and £224/MWh on 3 March - still historically elevated but moving in the right direction as the initial wave of panic premium softens.
Forward contracts followed the near curve lower, with Apr-26 baseload dropping £10.72 to £99.86/MWh and Summer-26 falling £9.71 to £91.66/MWh. Winter-26 settled at £84.69/MWh, maintaining the summer-over-winter premium at roughly £7/MWh - a mirror of the gas spread inversion and an equally unusual configuration at this point in the seasonal cycle. CCGT remains the dominant generation source and its role is set to deepen as wind output declines further today. Nuclear availability is materially constrained, with Hartlepool-2, Torness-2, Heysham 2-7, and Heysham 1-1 all fully or substantially offline, removing close to 2.5GW of low-carbon baseload from the stack. The combination of rising gas-for-power burn, below-norm wind, and reduced nuclear output creates a vulnerable near-term supply margin, particularly across morning and evening peaks.
Other Commodities
Brent was broadly flat at $81.40/bbl on 4 March, having found resistance around the $85/bbl level and sitting approximately 14% above its pre-conflict level. WTI traded at $74.66/bbl. Coal ARA CIF Cal-27 fell $5.28 to $121.13/tonne, tracking the wider commodity retreat and reflecting the partial unwinding of geopolitical premium rather than any fundamental supply shift. Carbon eased in line, with EUA Dec-26 falling €2.57 to €70.76/tonne and UK ETS Dec-26 declining £2.20 to £43.84/tonne - both moving broadly in parallel, leaving the EUA-UKA spread stable on the day. Sterling was marginally firmer, with GBP/EUR at 1.1488 and GBP/USD at 1.3372.
Outlook
Yesterday's price move on unconfirmed peace talk reports - and its subsequent reversal - illustrates the degree to which markets remain headline-driven. The fundamental picture is essentially unchanged: the QatarEnergy force majeure is still in force, Iran continues to threaten Strait of Hormuz transit, and Europe is entering the injection season with storage well below seasonal norms and its largest LNG supplier offline. The US has outlined shipping protection measures and the UK has deployed HMS Dragon to Cyprus following a drone strike on RAF Akrotiri, but neither development materially alters the supply outlook. Until there is a credible pathway to restarting Qatari LNG production and restoring safe passage through the Strait, the risk premium looks likely to remain embedded across the forward curve.