Energy Market Report - 20 March 2026
European wholesale energy markets extended their rally this week as the fallout from Iranian strikes on Qatar's Ras Laffan LNG facility reverberated across gas, power, oil and coal. Liquidity remains thin and intraday volatility elevated as traders price an uncertain geopolitical outlook heading into the weekend.
Natural Gas
The NBP day-ahead settled at 153.50p/therm on Thursday - a fourth consecutive session of gains - before recovering to around 154p/therm in Friday morning trade after a softer open. TTF tracked higher, with the day-ahead equivalent around €58.25/MWh. The key driver remains the damage to Ras Laffan, where approximately 17 per cent of Qatar's LNG export capacity has been assessed as requiring three to five years to restore. With Qatar previously the world's second-largest LNG exporter, the loss of those volumes tightens the global balance and complicates Europe's summer storage refill - EU inventories stand at around 29 per cent, and the 90 per cent target now looks challenging on current trajectories. The sum-26/win-26 spread has turned positive for both 2026 and 2027 as the market reprices injection economics. Away from geopolitics, UK system demand fell to around 193 mcm/day - below seasonal norms - as warmer weather eased heating load. Norwegian exit nominations declined to around 309 mcm/day, with maintenance extensions at Asgard and Dvalin trimming additional volumes. Langeled flows dropped to 39 mcm/day, down nearly 9 mcm/day on the session, while LNG send-out was mixed across South Hook and Dragon. Further along the curve, moves were substantial - Sum-26 NBP gained over 18p/therm on the day, with Sum-27 up roughly 22 per cent on the week. Until there is greater clarity on Qatari recovery timelines and the status of the Strait of Hormuz, meaningful downside on seasonal contracts is difficult to envisage.
Electricity
UK power tracked gas sharply higher. The day-ahead baseload settled at £137.00/MWh on Thursday, up more than £23 on the session, while the day-ahead peak reached £141.45/MWh. Wind generation averaged just 3.1 GW through the day - a stark contrast to Tuesday's 18.5 GW - leaving CCGT running at 12.2 GW and accounting for over 36 per cent of the generation mix. With gas-fired plant the marginal price setter at elevated fuel costs, prompt power had little choice but to follow. On the curve, Sum-26 baseload settled at £108.87/MWh, up around 7.6 per cent, while Win-26 gained over 10 per cent to £112.54/MWh. Nuclear availability is weakening - Heysham 2 Unit 7 tripped on an unplanned outage on 20 March, removing up to 545 MW for an expected 29 days, while Heysham 1 Unit 1 faces a 141-day planned outage from 28 March. Torness Unit 2 has been offline since January. Wind speeds are forecast to improve from next week into early April, which should reduce gas-for-power demand by around 30 mcm/day and offer some prompt relief, though cooler-than-seasonal temperatures arriving alongside will partially offset the benefit.
Other Commodities
Brent crude held at $108.65/bbl after gaining over 8 per cent on the week, though it sold off from Thursday morning highs as diplomatic rhetoric appeared to cool, with the US signalling efforts to assemble a naval coalition to escort vessels through the Strait of Hormuz. The strait remains closed, and renewed strikes between Israel and Iran on Friday morning keep a significant risk premium embedded. Coal rallied alongside the broader complex - ARA CIF Cal-27 settled at $135.18/tonne, up over 4 per cent on the day and more than 7 per cent on the week, with higher gas prices pulling coal-fired generation back into merit on the continent. Carbon markets whipsawed - the Dec-26 EUA dropped to €63.65 at Thursday's settlement before rebounding sharply toward €68/tonne on Friday morning, following reports that the European Commission is considering changes to the EU ETS reserves mechanism. UK ETS followed a similar pattern, with Dec-26 UKAs falling to £34.67 before being offered around £38.19 on Friday. The EUA-UKA spread remains wide.
Outlook
The geopolitical picture remains the dominant price driver heading into the weekend. The Strait of Hormuz closure, the structural loss of Qatari LNG capacity and ongoing Israel-Iran hostilities keep a significant premium across the complex, and until there is meaningful progress on any of these fronts, volatility is likely to persist. On the supply side, Norwegian exit nominations are declining ahead of the April maintenance season, with planned outages on Vesterled and Langeled from mid-April set to further reduce pipeline flows to the UK. Near-term relief may come from improving wind forecasts for next week and demand running below seasonal norms across northwest Europe, but UK nuclear availability is deteriorating and the global LNG market is structurally tighter than it was a week ago. The coming weeks will test whether storage refill can proceed at a pace sufficient to meet winter targets - a question that is likely to keep seasonal contracts well bid.