Energy Market Report - 23 March 2026
European gas and power markets ended last week sharply higher as the Middle East conflict continued to escalate. Brent crude pushed above $112/bbl on Friday as the US threatened direct action against Iranian energy infrastructure, with gas and carbon also posting significant gains.
Natural Gas
Gas prices surged through the back end of last week, with the NBP front month rising over 6 per cent to around 158.80p/therm and TTF climbing more than 7 per cent. The rally has been driven by geopolitics - principally the US issuing a 48-hour ultimatum threatening strikes on Iranian energy infrastructure if the Strait of Hormuz is not reopened - rather than physical fundamentals, which remain relatively comfortable. The UK gas system closed Friday 26 mcm/day long, Norwegian exit nominations rose to 328.4 mcm/day, and Langeled flows increased by nearly 11 mcm/day to 56.6 mcm/day. LNG send-out across UK terminals was healthy at around 64 mcm/day, with Isle of Grain up over 13 mcm/day on the day. Seasonal contracts gapped higher - Sum-26 was offered around 157p/therm and Win-26 at 160p/therm - reflecting the structural implications of damage at Qatar's Ras Laffan complex, where roughly 17 per cent of LNG export capacity remains offline with repair timelines of three to five years. European storage stood at just 28.66 per cent as of 18 March, well below prior-year levels, prompting the EU to lower its refilling target to 80 per cent. Norwegian curtailments of around 30 mcm/day are due to fall to zero by 1 April, and the UK temperature outlook turns above seasonal norms into early April.
Electricity
UK baseload power also rose, though gains were more contained. The front month settled around £109.00/MWh - up roughly 2 per cent - as a forecast surge in wind generation capped the upside. UK wind output is expected to more than double from around 8 GW to over 19 GW by mid-week, keeping gas-for-power demand subdued at around 15 mcm/day. Last week wind averaged just 8.6 GW, roughly half the prior week's 15.2 GW, which left power prices more exposed to gas-fired generation costs. Nuclear availability remains strained, with over 1.7 GW offline. Heysham 2-7 suffered a new unplanned outage on 20 March removing 545 MW for an expected 29 days, Hartlepool-2 remains fully offline, and Torness-2 is down for planned work. System buy prices peaked at £180/MWh on Friday morning, though improved wind this week should ease system stress. On the curve, Sum-26 baseload was offered around £112/MWh and Win-26 at £119/MWh.
Other Commodities
Brent crude settled at $112.19/bbl on Friday, up $3.54 on the day, with WTI at $98.23/bbl. The geopolitical premium is firmly in control, and any strike on Iranian oil or gas facilities would likely take prices well above current levels. Carbon certificates jumped sharply - EUAs settled at €67.66/tonne, up €4.01, after the European Commission President publicly defended the EU ETS at a Brussels summit, while UKAs rose £2.47 to £37.14/tonne. Coal eased slightly, with ARA CIF Cal-27 at $132.77/tonne, though prices remain elevated relative to 2024 and early 2025.
Outlook
The market's direction this week hinges on the outcome of the US deadline on Iran - any military action against energy infrastructure would trigger further repricing across the complex. The physical gas picture is considerably more comfortable than headline prices suggest, with recovering Norwegian flows, healthy UK LNG send-out and a wind surge set to limit gas-for-power demand. However, European storage below 29 per cent and the expected QatarEnergy force majeure on Ras Laffan provide a structural floor under deferred contracts that will not fade quickly.