Energy Market Report - 13 March 2026
Energy markets remain dominated by the Iran conflict, with Brent crude settling above $100/bbl for the first time since 2022 and UK gas seasonal contracts trading roughly 50 per cent above year-ago levels. The major counter-move came from carbon, where EU ETS allowances sold off sharply after EU leaders signalled urgent action on electricity prices and carbon price volatility.
Natural Gas
NBP day-ahead settled at 125.75p/therm on Thursday, up 2.75p on the session, with gains broadening across the curve as the market increasingly prices in a prolonged disruption to Qatari LNG supply. Sum-26 rose around 3.2p to 123.65p/therm and Win-26 climbed 4.3p to 120.80p/therm - the longer Ras Laffan remains offline, the tighter European summer injection economics become, and that risk is being pulled forward into winter contracts. On the Continent, THE Q3-26 led gains at 3.5 per cent, with TTF Q3-26 up roughly 3 per cent. Front-month THE continues to trade at a premium to other northwest European hubs, holding around €0.30 above NBP on a converted basis.
This morning, UK spot and front-curve contracts opened broadly flat while the wider curve edged marginally higher. The gas system opened 9 mcm long. Norwegian exit nominations sit at 334.8 mcm/day, slightly below yesterday's 335.6 mcm/day, with Langeled at 68 mcm/day and Vesterled muted. LNG send-out has picked up to 60 mcm/day, led by South Hook rising to 38 mcm/day, partially offsetting the loss of Qatari volumes. System demand on 13 March is running at 226.2 mcm/day, up 11.3 mcm from the previous day. European storage stands at 27.27 per cent as of 10 March, with net withdrawals slowing. Crown's 14-day demand model points to above-seasonal-norm demand until at least 26 March, providing a secondary source of support beneath the geopolitical bid. Germany's lack of interest in long-term LNG terminal capacity bookings adds a structural wrinkle - greater reliance on spot and flexible cargoes pushes premium into seasonal contracts and raises the risk of lower injection rates this summer.
Electricity
UK power tracked gas higher on Thursday's settlement, with baseload contracts gaining across the curve. Day-ahead base settled at £56.44/MWh, up £0.32 on the session, while Apr-26 rose nearly £2 to £97.38/MWh and Sum-26 gained £2.62 to £95.91/MWh. Peak prices showed similar strength, with day-ahead peak settling at £67.03/MWh, up nearly £4. The geopolitical risk premium in gas and the oil rally that has persisted all week continue to set the tone for prompt and near-season power.
Elevated wind generation outperformed seasonal expectations again on Thursday and provided a substantial share of the supply mix, acting as a price ceiling on the near-curve and easing pressure on short-term fundamentals. Weekend contracts found support as wind is expected to drop off before ramping back above seasonal norms for the working week. Further out, the picture was more mixed - calendar products sold off in sympathy with the sharp decline in EU ETS, with German Cal-27 power losing €0.50 and Cal-28 falling €1.20, pushing German spark spreads to an eight-month low as the power contract lost more value than its gas equivalent. Nuclear availability remains constrained by ongoing outages at Hartlepool 2, Torness 2, and units at Heysham 1 and 2, with several planned outages extending through the summer.
Other Commodities
Brent crude settled at $100.46/bbl on Thursday, crossing the $100 mark for the first time since 2022 before pulling back slightly into the close. WTI settled at $95.73/bbl. Both benchmarks are up roughly 18 per cent on the week. This morning oil has softened after the US issued a 30-day licence permitting countries to purchase Russian crude and refined products already at sea, though weekly gains remain substantial. Coal ARA CIF Cal-27 settled at $126.00/t, up around 1.6 per cent on the day and 2.2 per cent on the week, finding continued support from the broader energy complex. Sterling was broadly stable, with GBP/EUR at 1.1595 and GBP/USD at 1.3341.
Carbon
Carbon was the standout mover in the opposite direction to the wider complex. EUA Dec-26 fell 4.4 per cent to €68.73/tonne and Dec-27 lost €3.60, hitting its lowest level in nearly a year. The sell-off was triggered by EU leaders actively discussing a call for the European Commission to present concrete proposals to lower electricity prices and reduce carbon price volatility - a development that weighed heavily on sentiment. UKA Dec-26 eased £0.30 to £39.77/tonne, with the UKA-EUA spread largely unchanged on the day.
Outlook
Energy markets are caught between competing forces. The ongoing Strait of Hormuz closure and prolonged Qatari LNG outage underpin gas and oil, with Brent above $100/bbl and NBP seasonal contracts at levels roughly 50 per cent above where they sat a year ago. Against that, the sharp EU carbon sell-off on policy intervention signals is pulling further-dated power lower and compressing spark spreads, while improving wind forecasts and rising LNG send-out from non-Qatari sources cap near-term upside. UK weather forecasts show a brief dip below seasonal average this weekend before temperatures climb 3-4°C above normal early next week, which should ease near-term thermal demand. The market remains highly sensitive to any diplomatic breakthrough or further escalation - the duration of the Hormuz disruption and any policy response from Brussels on carbon pricing are the two key variables to watch.