Energy Market Report - 27 March 2026
Wholesale energy markets corrected sharply higher on Thursday, breaking a four-day bearish streak as colder weather, weaker renewables and geopolitical risk across Iran and Ukraine fuelled gains. Overnight developments have since tilted bearish, with Washington extending its Iran deadline and oil prices retreating.
Natural Gas
Gas prices surged on Thursday, with the NBP day-ahead settling at 136.70p/therm - up more than 5 per cent - and TTF assessed around €55.42/MWh. Below-average temperatures across northwest and southern Europe lifted heating demand, while UK system demand reached 239 mcm on the day before easing to around 204 mcm this morning, still roughly 29 mcm below seasonal norms. Norwegian nominations stepped up to 338 mcm/day, with Langeled throughput rising to 66.3 mcm/day, and LNG send-out remained comfortable despite easing day on day. On the curve, Summer-26 gas was offered around 139p/therm this morning and Winter-26 near 144p/therm. European gas storage stood at just 28.45 per cent full on 25 March - the lowest for this time of year since 2022 - keeping a firm floor under injection-season pricing despite some softening in geopolitical risk this morning after the US extended its Iran deadline by a further ten days and Tehran permitted ten tankers through the Strait of Hormuz as a goodwill gesture.
Electricity
UK day-ahead baseload settled at £113.50/MWh on Thursday, with peak at £115.00/MWh, both sharply higher on weaker renewable output and firmer fuel costs. The front-month contract (April-26) settled at £99.82/MWh and was being offered around £101.25/MWh this morning, though pricing was drifting back toward £99.25/MWh as European power markets opened lower on improving wind forecasts and the bearish overnight developments from the Iran standoff. Several unplanned nuclear outages continue to constrain the generation stack, with Heysham 1 Unit 2 running at reduced output since late February and Heysham 2 Unit 7 curtailed significantly since 21 March, limiting the downside for near-dated contracts. Wind generation is forecast to pick up over the weekend, which should ease residual demand, though any underperformance could quickly re-tighten the system given the current outage profile.
Other Commodities
Brent crude settled at $108.01/bbl on Thursday, up roughly 5.7 per cent on the day, supported by Ukrainian drone strikes on two key Russian Baltic Sea ports that reportedly impacted around 40 per cent of Russia's oil export capacity from those facilities. Despite Thursday's surge, oil prices fell on Friday morning, tracking towards their steepest weekly decline in six months as the extended Iran deadline eased immediate supply-disruption fears. Carbon continued its strong weekly recovery, with EUA Dec-26 settling at €71.65/tonne - up more than 12 per cent over the past week - while UK ETS Dec-26 held at £38.00/tonne, up roughly 9.6 per cent on the week. The carbon rally reinforces the cost base for fossil-fuel generation and keeps a floor under near-dated power. Coal CIF ARA Cal-27 settled at $133.06/tonne, up 2.7 per cent day on day but off about 1.6 per cent on the week.
Outlook
The market enters the weekend finely balanced. Improving wind forecasts and the softening tone from the Iran standoff should ease prompt gas and power prices, but the underlying picture remains supportive. European storage at its lowest seasonal level since 2022 keeps a premium in place across near-season contracts, while unresolved conflicts in both Iran and Ukraine mean risk can re-emerge quickly on any escalation. UK nuclear constraints add further support to power. Near-term direction will hinge on whether improving renewables and diplomatic progress can outweigh the structural tightness heading into the injection season.