Energy Market Report - 08 April 2026
European energy markets sold off sharply following the announcement of a two-week US-Iran ceasefire, unwinding much of the geopolitical risk premium built through late March and Easter. Gas, power and crude all fell heavily, though the brief window of the agreement leaves significant uncertainty over whether lasting terms can be reached.
Natural Gas
Prompt gas prices collapsed at the open as the ceasefire removed the immediate Hormuz supply disruption premium. The NBP day-ahead had settled at 132.80p/therm on 7 April - up 4.6% over the Easter break as Trump's rhetoric intensified - but morning indicatives pointed to levels around 110.50p/therm, a decline of more than 22p/therm. TTF followed a similar trajectory. Two Qatari LNG vessels had reportedly turned around in the Strait after apparently being granted passage, and the market will now watch closely for a broader resumption of traffic through the corridor.
Underneath the headline moves, fundamentals remain soft. Northwest European temperatures are above seasonal norms, keeping gas-for-power demand muted. UK system demand sat near 161 mcm on the morning, around 44 mcm below seasonal normal, and the system opened 10 mcm long. Norwegian nominations held above 330 mcm/day, though UK-bound flows via Langeled fell by about 12 mcm/day even as overall NCS output rose. LNG send-out was modest, with South Hook at 5 mcm/day, Isle of Grain on boil-off at 3 mcm/day, and Dragon inactive. EU storage continued to inject at around 28.6% full. Planned maintenance at Troll is due to commence Thursday, marking the start of the summer turnaround season. Further along the curve, Winter 26 NBP fell around 22p/therm to near 112.90p/therm, while Summer 27 dropped roughly 13p/therm - consistent with the market repricing a near-term risk premium rather than fundamentally reassessing long-dated supply-demand.
Electricity
UK power fell sharply on the prompt, tracking gas lower and amplified by a strong renewables outturn. Wind accounted for over 41% of the generation mix on the morning, making it the single largest source on the system. Low-carbon generation met close to 60% of overall demand, easing reliance on gas-fired plant. The day-ahead baseload had settled at £110.60/MWh on 7 April but morning indicatives were around £90.50/MWh, a drop of over £20/MWh. UK power prices had already spent much of Easter Sunday in negative territory owing to the combination of low holiday demand and high renewable output.
Losses were slightly less pronounced in power than in gas, partly because carbon moved higher early in the session. The Dec-26 EUA contract touched €74/tonne before pulling back, lending temporary support to clean spark spreads. Wind generation is expected to dip briefly mid-week before improving again later, so prompt volatility may persist. On the curve, Winter 26 baseload fell roughly £9.76/MWh to around £93.50/MWh. Nuclear availability remains mixed - Torness 2 is offline on a planned outage, Heysham units carry both planned and unplanned derates, and further outages are scheduled from May through the summer - limiting the structural downside for forward baseload even as the geopolitical premium deflates.
Other Commodities
Crude led the sell-off. Brent front-month settled at $109.27/bbl on 7 April but was reported around $93/bbl in early trading - a fall of roughly 15% - as the ceasefire removed the most acute supply risk. Whether the move holds depends heavily on the durability of the agreement and the pace at which Hormuz traffic normalises. Iran is reportedly seeking selective transit fees of up to $2 million per vessel for shipments passing through the Strait, which could introduce a new structural cost for European gas imports routed via the Middle East, though legality remains contested. Coal eased, with API2 Cal 2027 at $125.10/tonne, down around 4.8% week-on-week. Carbon was the outlier: EUAs settled marginally lower on 7 April at €71.51/tonne but spiked to €74/tonne in early Wednesday trading before retreating, while UKAs drifted lower with Dec-26 settling at £41.14/tonne.
Outlook
The key uncertainty is whether the two-week ceasefire converts into a lasting arrangement or simply delays the next escalation. Forward curves repriced significantly on the prompt and near-curve but were less affected further out, suggesting the market views the risk premium reduction as largely a near-term event. Norwegian maintenance beginning this week will gradually reduce available supply through the summer, while EU storage injections continue supported by mild weather. Wind-dominated generation should keep prompt power prices under pressure if the current pattern holds, though mid-week dips in output may introduce volatility around the ramps.