Expert analysis
TTF | Power | EUA
Market context: headlines short term, fundamentals mid-term
The European energy market continues to move at the intersection of geopolitics and fundamentals. In the short term, prices are clearly driven by headlines, while in the mid-term, supply balance and regulation are becoming increasingly dominant.
Gas (TTF): geopolitics in control, fundamentals tightening
Uncertainty in the gas market remains elevated. Tensions around the Strait of Hormuz pose a potential LNG supply risk, while the return of Asian demand is increasing competition for cargoes. European storage levels remain low, and the late start of the injection season raises the risk of price spikes. This is further supported by colder weather and weak renewable generation, particularly in Germany.
At the same time, several bearish factors are present. A potential diplomatic breakthrough between the US and Iran could quickly reduce the current risk premium. Norwegian flows remain stable at high levels, while industrial demand in Europe continues to be weak.
The key question for the market is whether geopolitical headlines will translate into real supply disruptions. A critical point to watch is whether the US holds its commitment not to target Iranian energy infrastructure until April 6, and whether Iran shows genuine willingness to negotiate. In addition, position closing ahead of the Easter and spring holiday period may trigger extreme short-term volatility.
From a price perspective, the key factor remains whether risks around the Strait of Hormuz are resolved quickly or persist over a longer period.
Power: driven by gas and carbon
Power markets remain strongly linked to gas and carbon prices. Weak German renewable generation and high gas and EUA prices are pushing marginal costs higher, further supported by increased demand due to colder weather.
On the downside, lower demand during the holiday period, favorable hydro conditions, and increasing solar generation from the second half of April act as bearish factors. Overall, short-term price movements continue to be driven primarily by gas and carbon.
Carbon (EUA): fundamentals and regulation both matter
In the carbon market, weak renewable output increases the role of fossil generation, supporting prices, while the €70/t level continues to act as a technical support. Colder weather also contributes to higher demand.
At the same time, downside risks include the MSR reform, declining industrial demand, and weakening investor positioning. EU-level regulatory decisions therefore remain a key driver in the coming period.
WHAT TO WATCH: key factors in the coming weeks
Short-term market direction will be shaped primarily by:
- US–Iran geopolitical developments
- Real supply-side news related to the Strait of Hormuz and LNG flows
- The pace of European gas storage injections
- German renewable generation
- EU ETS regulatory communication
- Fund positioning in gas and carbon markets
Bottom line
In the short term, the market remains strongly headline-driven, with high volatility.
In the mid-term, LNG supply and overall balance will be the key drivers.
Upside risks currently dominate, but a rapid geopolitical de-escalation could trigger a sharp correction across gas, power, and carbon markets.
Analysis written by: Tóth Eszter Lilla
30.03.2026.