Energy Market Report - 17 March 2026
Gas and power markets showed mixed movements on Monday as the Middle East conflict entered its third week. Risk premiums held firm despite a moderation in day-to-day volatility, with above-seasonal temperatures offering some near-term demand relief but below-average European storage and a forecast drop in wind generation keeping the market cautious.
Natural Gas
NBP prompt settled at 124.75p/therm on Monday, while the front-month Apr-26 contract traded around 133p/therm. TTF followed a similar trajectory, with the front month moving above €52/MWh. The ongoing Strait of Hormuz disruption continues to underpin risk premiums, though volatility has eased over recent sessions as the market absorbs the current scope of hostilities - reports that US strikes near Iran's Kharg Island targeted military rather than energy infrastructure provided some reassurance. On the supply side, Langeled flows dropped around 10 mcm/day to approximately 62 mcm/day following the start of planned maintenance at Karsto, expected to last through the end of the week. The UK system was around 3 mcm/day long despite reduced Norwegian supply, supported by healthy LNG send-out running at roughly 60 mcm/day, with six cargoes expected over the next twelve days. Norwegian exit nominations to the Continent sat slightly lower at around 331 mcm/day. EU gas storage stood at just under 29 per cent on 14 March - below average for late winter - keeping the upcoming injection season firmly under scrutiny. Further along the curve, seasonal contracts firmed, with NBP Sum-26 trading around 128p/therm and Win-26 at approximately 126p/therm, the Sum-26/Win-26 spread remaining positive. Weather models point to temperatures as much as 4°C above seasonal norms across the UK by mid-week, which should moderate system demand and slow storage withdrawals. However, wind generation is forecast to drop towards the weekend, pushing gas-for-power demand on the day-ahead to around 44 mcm/day.
Electricity
UK day-ahead baseload settled at £87.01/MWh on Monday - a sharp fall from Friday's £108.61/MWh - as robust renewable generation weighed heavily on prompt pricing. Day-ahead peak printed at £86.09/MWh. Front-month Apr-26 baseload lifted above £100/MWh, taking direction from firmer gas and oil alongside reduced wind generation forecasts. German front-month power also gained, settling around €2/MWh above Friday's level. Seasonal baseload contracts edged up, with Sum-26 at £95.77/MWh and Win-26 at £96.94/MWh. The nuclear picture remains strained: Hartlepool Unit 2 has been offline since March 2025, Torness Unit 2 is on a planned outage through early April, and several Heysham units carry a mix of planned and unplanned outages. A forecast drop in wind output later this week will increase residual load and could support prompt peaks if gas-for-power burn rises. Rising electricity costs and volatile carbon markets are also set to feature in European policy discussions this week, with calls for intervention to help offset the impact on consumers and industry.
Other Commodities
Brent crude settled at $100.21/bbl on Monday - down around 2.8 per cent from Friday - though it touched $105/bbl at points during the session as diplomatic efforts around the Strait of Hormuz produced more rhetoric than resolution. Several US allies have rejected calls to deploy warships to help reopen the strait, and Saudi Arabia has increased utilisation of its East-West Petroline to reroute crude via the Red Sea, though the pipeline can only partially offset normal strait volumes. WTI fell more heavily, settling at $93.50/bbl. Coal ARA CIF Cal-27 was broadly flat on the day at $125.52/t but is down around 5 per cent on the week. Carbon drifted lower, with EUA Dec-26 at €69.00/t and UK ETS Dec-26 dropping to £38.28/t from £39.54/t on Friday. Carbon remains remarkably settled given the volatility elsewhere in the complex and is exerting mild downward pressure on fossil fuel generation margins.
Outlook
The near-term picture is shaped by competing forces. Above-seasonal temperatures across north-west Europe should moderate gas demand through mid-week, and healthy LNG arrivals are keeping the physical balance manageable. Working against this, European storage at around 29 per cent - below average for late March - means the injection season beginning 1 April starts from a weak position, lending structural support to summer contracts. Karsto maintenance will cap Norwegian flows until the weekend, and a forecast drop in wind generation could firm prompt power prices later in the week. The Middle East conflict remains the dominant variable: any fresh escalation around the Strait of Hormuz would reprice quickly, while signs of genuine de-escalation could unwind risk premiums currently baked into the curve.