Energy Market Report - 31 March 2026
UK wholesale gas and power markets opened lower on Tuesday as prices corrected across the curve, partially unwinding the sharp gains driven by the Iran conflict through March. Diplomatic signals offered tentative hope of de-escalation, though critically low European storage levels heading into injection season continue to underpin the broader complex.
Natural Gas
Gas prices fell across the board in early Tuesday trading, with seasonal contracts bearing the brunt of the sell-off. The NBP day-ahead settled at 136.00p/therm on Monday, though morning indications pointed lower, with the new front-month May-26 contract trading around 134.58p/therm. Sum-26 NBP dropped to approximately 134.00p/therm, down 5.00p on the day, while Win-26 shed 7.50p to 136.50p/therm. The April contract expires today at around 136p/therm - some 58p higher than when it became front month, underscoring the scale of geopolitical risk premium embedded over the past four weeks. TTF spot was at €55.04/MWh. On the supply side, the UK system opened around 14 mcm/day long, with demand easing to 194 mcm/day. Norwegian nominations held at a healthy 335.9 mcm/day despite elevated planned maintenance, including a partial outage at Nyhamna, and LNG send-out rose to around 49 mcm/day. An unplanned outage at Culzean removed up to 11.5 mcm/day of domestic supply. The structural picture remains challenging: EU storage closes winter at just 28%, with Germany at 22% - levels only marginally above the 2022 crisis lows - placing significant pressure on the injection season that begins tomorrow.
Electricity
Power tracked gas lower on Tuesday morning. The UK day-ahead baseload settled at £114.64/MWh on Monday - sharply above Friday's £58.10/MWh on weekend-to-weekday demand differentials - but the May-26 front-month indicative was around £100.50/MWh. Sum-26 baseload fell to £102.00/MWh, down £2.00, while Win-26 dropped £3.25 to £105.50/MWh. Monday's session had benefited from a strong renewable contribution, with wind, solar, biomass and hydro delivering around 62% of the GB power mix, limiting CCGT dispatch. However, the outlook for the working week is less constructive. Wind generation is forecast to weaken across north-west Europe, with German output expected to fall around 10 GW below seasonal norms tomorrow, and Dutch wind also dropping below average. On the nuclear side, Heysham 1-1 enters a planned 137-day outage from 1 April, joining existing unplanned outages at Heysham 1-2 and Heysham 2-7 - together reducing available nuclear capacity by close to 1 GW. Further-dated seasons were more resilient, with Sum-27 at £80.00/MWh and Win-27 at £85.00/MWh, supported by carbon costs and structural baseload demand.
Other Commodities
Crude oil remained elevated and volatile. Brent settled at $112.78/bbl on Monday, up around 13% on the week, with overnight reports of a Kuwaiti tanker catching fire and a separate tanker struck off Dubai reinforcing physical risk in the region. However, momentum faded through the afternoon as diplomatic signals emerged, including indications from Washington of willingness to pursue a resolution without the reopening of the Strait of Hormuz as a precondition. Carbon certificates firmed modestly, with EUA Dec-26 at €72.18/tonne, up around 4.2% week-on-week, and UK ETS Dec-26 at £38.24/tonne. Coal also strengthened alongside the broader complex, with ARA CIF Cal-27 at $134.37/tonne. The uptrend in carbon reflects spillover from the energy complex and tighter residual load assumptions linked to the crisis, though near-term pricing remains sensitive to auction supply and demand swings.
Outlook
The market's focus is shifting decisively toward injection season, which begins tomorrow with European storage at levels that will demand sustained high flows throughout the summer to rebuild ahead of next winter. Any disruption to Norwegian supply - where an elevated maintenance schedule runs through the coming months - or a return of cold weather would quickly re-tighten the outlook. The startup of Golden Pass LNG on the US Gulf Coast is a constructive medium-term signal for Atlantic supply, though ramp-up will take time. In the near term, weakening wind forecasts, deteriorating UK nuclear availability and the ongoing Iran conflict all point to continued volatility, with the storage deficit placing a structural floor under prices regardless of short-term sentiment shifts.