Energy Market Report - 26 March 2026
Energy markets reversed a four-session losing streak on Thursday morning, opening sharply higher as overnight headlines cast fresh doubt over Middle East peace talks. The geopolitical war premium reasserted itself across gas, power, oil and carbon, overriding what remain broadly bearish underlying fundamentals heading into April.
Natural Gas
Wednesday's session continued the recent softening trend, with NBP day-ahead settling at 129.75p/therm - down 1.25p on the day and marking a fourth consecutive decline. TTF day-ahead was assessed at €52.52/MWh, also slightly lower, as some of the risk premium tied to the Middle East conflict drained away on signals the US was prepared to negotiate a settlement with Iran. Norwegian supply supported the move, with total NCS exit nominations reaching 324 mcm/day and Langeled delivering 55 mcm/day to the UK. That drift reversed sharply on Thursday morning after Iran signalled it was unwilling to negotiate despite confirming receipt of a US 15-point peace proposal - contrasting with President Trump's insistence that Tehran was keen to strike a deal. NBP front month was pricing around 137p/therm in early trade, with seasonal contracts jumping significantly: Sum-26 up around 10p/therm to 136.50p/therm and Win-26 up 11.50p to 140p/therm. The physical picture remains comfortable - the UK system opened around 2 mcm long, total demand sat at roughly 234 mcm/day, and Norwegian nominations have risen further to 335 mcm/day following the return of Aasta Hansteen and Dvalin from maintenance. However, LNG presents a growing supply-side risk: European terminal send-out dropped sharply to 330 mcm/day on 25 March against a month-to-date average of around 557 mcm/day, and March is on track to be the first month in three where total LNG cargoes to Europe fall below year-ago levels.
Electricity
UK power fundamentals were little changed on Wednesday, with wind generation dominant at around 21.6 GW - roughly 56% of the mix - while CCGT output slipped to just 2.4 GW. Day-ahead baseload settled at £98.11/MWh and day-ahead peak at £107.68/MWh, with curve contracts edging lower across the board: Sum-26 baseload closed at £99.22/MWh and Win-26 at £102.70/MWh. Thursday morning saw power track gas sharply higher, with the UK baseload front month offered around £104/MWh, Sum-26 indicated near £103/MWh and Win-26 at £107/MWh - reversing the week's losses. Declining temperatures and lower wind speeds are lifting demand on the prompt today, though forecasts suggest wind will pick up again over the coming days, which should limit any sustained tightness. The nuclear fleet continues to operate below full capacity, with unplanned outages at Heysham 1 and Heysham 2 together accounting for close to 1 GW of lost output.
Other Commodities
Brent crude settled at $102.22/bbl on Wednesday - down $2.27 on the day and nearly 5% lower week-on-week - but recovered back above $100/bbl in early Thursday trade as ceasefire optimism faded. Coal was marginally firmer, with ARA CIF Cal-27 at $129.59/tonne. Carbon edged lower on Wednesday, with Dec-26 EUAs settling at €70.74/tonne and UK ETS Dec-26 at £37.99/tonne, though both contracts firmed modestly on Thursday morning. The EUA-UKA spread remains wide. Sterling was broadly flat at 1.1553 against the euro and 1.3363 against the dollar.
Outlook
The fundamental backdrop heading into April is bearish - Norwegian supply is recovering, the UK system is balanced, and milder weather is expected from tomorrow with rising wind output set to ease gas-for-power demand. However, the geopolitical picture continues to dominate pricing. Conflicting signals over Middle East peace talks are sustaining wide intraday swings and keeping volatility elevated, while the approaching Norwegian maintenance season - with Vesterled works from mid-April and Langeled outages in May - adds a further layer of risk as European storage begins its summer refill. Tightening LNG supply to Europe, the EU's postponed Russian oil phase-out decision, and the UK's authorisation to seize shadow fleet tankers all reinforce the view that seasonal contracts will remain well above year-ago levels until there is meaningful diplomatic progress.