Energy Market Report - 01 April 2026
Wholesale energy markets opened sharply lower on Wednesday morning as diplomatic signals raised cautious optimism that the Iran conflict may be nearing its conclusion. Gas and power prices fell across the curve, with geopolitical risk premia being actively unwound.
Natural Gas
Gas prices dropped significantly as de-escalation rhetoric gathered pace. President Trump indicated US operations in Iran could conclude within two to three weeks, remarks echoed by Tehran's willingness to end hostilities, while China and Pakistan proposed a ceasefire plan including reopening the Strait of Hormuz. The NBP day-ahead contract settled at 126.00p/therm on Tuesday, down 10p on the day, and is indicated around 123p/therm this morning. TTF spot was assessed near 48.21 EUR/MWh. Yesterday also marked the expiry of Apr-26, Q2-26 and Sum-26 contracts, with Win-26 now stepping in as front season. The newly rolled front month May-26 settled at 128.10p/therm but is offered around 122p this morning, while Win-26 is down more than 7% from its 129.71p settlement. Norwegian flows are steady at around 331.7 mcm/day, with only a minor curtailment at Ekofisk. However, UK LNG send-out fell sharply - down around 11 mcm/day - as geopolitical disruption slowed vessel arrivals. EU storage closed the winter season at 28.05% full, roughly 5.5 percentage points below the same point last year, meaning the injection season starts from a lower base. Updated weather models point to a cooler spell around mid-April which may limit further downside on the prompt.
Electricity
Power prices tracked gas lower but with more restraint on the prompt. UK day-ahead baseload settled at £113.30/MWh on Tuesday, with this morning's indication around £106.50. The limited downside yesterday was underpinned by a sharp drop in renewable generation - wind output tumbled nearly 56% day-on-day and solar fell over 20%, driving a 185% increase in CCGT offtake which provided a firm floor under prompt pricing. Further out, Win-26 baseload settled at £102.23/MWh and is offered around £100.00 this morning, while May-26 base is indicated at £93.00. Nuclear availability remains a watch point as a planned 137-day outage at Heysham 1-1 commenced yesterday, joining ongoing unplanned outages at Heysham 1-2 and Heysham 2-7. Renewables across Germany and the Netherlands are forecast to recover toward seasonal averages by Friday, and the long Easter weekend should ease demand across European markets, both pointing to softer prompt pricing on the Continent.
Other Commodities
Oil was stronger on Tuesday's settlement, with Brent closing at $118.35/bbl, up $5.57 on the day. However, prices have pulled back sharply this morning - down around 3% - as the prospect of a reopened Strait of Hormuz eases the supply risk premium that has built since the conflict began. Coal ARA CIF Cal-27 declined 2.2% to $131.46/tonne. Carbon was mixed - EUA Dec-26 settled at €72.51/tonne, up marginally, while UKAs moved more sharply with UK ETS Dec-26 jumping £3.31 to £41.55/tonne, a move that appears detached from the broader bearish tone and likely reflects positioning or thin liquidity around the front-season roll.
Outlook
The dominant driver remains the trajectory of the Iran situation and the pace at which the geopolitical risk premium continues to unwind. Should diplomatic progress materialise in the coming weeks, particularly around reopening the Strait of Hormuz, further downside across gas, power and oil is likely. However, EU storage starting the injection season from a lower base than last year provides structural support to summer contracts, and a cooler mid-April could lend some near-term floor to prompt pricing. Nuclear constraints and the Easter demand reduction will shape the power market's short-term direction, though all eyes remain firmly on the geopolitical narrative.