Hi Marine Fuels Team,
What happened in the market?
Last week saw persistent selling across the entire fuel complex, including gas, coal, emissions, and power within the European energy markets. The bearish sentiment continued from the previous weeks, extending the downward trend.
On Wednesday night, the Financial Times published a headline suggesting a potential relaxation of EU gas storage targets below 90%. However, by Thursday, other media outlets contradicted the firmness of this claim, leading to a reversal in sentiment. As a result, energy markets across Europe surged on Thursday, partially unwinding some of the downward pressure that had built up over the past two and a half weeks.
Weather models are signalling a possible sudden stratospheric warming (SSW) event, which could increase the likelihood of colder temperatures toward the end of March and early April. This development may impact energy demand and price movements in the coming weeks.
Friday’s failed White House meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy has fuelled concerns over the possibility of a peace deal with Russia, which had previously raised expectations of a return of some Russian gas flows to Europe. The breakdown in discussions has added uncertainty to the gas market, leading to a price surge of up to 6.7% in European benchmark futures according to Bloomberg.
European fuel reserves remain lower than usual for this time of year, keeping supply tight. While a recent slowdown in storage depletion—due to milder weather—helped drive prices lower through February, traders are now bracing for a potential cold snap later this month. Additionally, rising concerns over infrastructure security persist, with Russia reporting another drone attack on the TurkStream pipeline over the weekend.
ING strategists noted that “uncertainty abounds following last week’s showdown between the U.S. and Ukraine,” making a peace deal—and any potential energy market stabilization—seem more distant than before. Meanwhile, Equinor ASA, Europe’s top gas supplier, warned that market volatility will likely continue, with gas prices remaining “very spiky” in the near term.
As of today, prices have moved higher, with the market reacting to last week’s shifts. However, the broader complex has remained relatively bearish, following the prevailing trend from the past one to two weeks.
The talk of easing gas storage targets lost momentum by Thursday, and EU Allowances (EUAs) largely followed gas price movements throughout the session.
Overall, while last week was marked by selling pressure, the late-week rebound and geopolitical uncertainty suggest potential shifts in market direction.
Last Monday in the EU ETS, December 2025 Futures experienced another wide trading range on strong volume, ultimately settling slightly lower after reaching the week’s high of €74.99. By Wednesday, most of the energy complex declined, with EUAs following suit as natural gas prices dragged the market down to a new low of €70.69—its lowest level since December. On Thursday, the market rebounded, with EUA futures reversing course alongside significant gains in natural gas, resulting in a weekly trading range of €4.30. Finally, on Friday, the market settled at €71.00, marking a €2.90 decline from the previous week.
Source: Bloomberg
Price & position data
December 2025 Futures December 2025 Futures
Week 9 3 Months ICE position w/w Change
VWAP €72.35 €75.95 Investment Firms -327,188 4,312
High €74.99 €84.50 Investment Funds 50,322 -8,349
Low €70.69 €64.05 Commercial Undertakings 211,647 5,142
Average Daily Volume 31,762 25,893 ETS Compliance Firms 65,362 -1,269
Source: Bloomberg Source: Bloomberg, Definitions on ICE,
Other Emissions News
• The UK carbon market’s allowance supply will shrink by 18% in 2025, a sharper decline than last year’s 10% drop. This reduction will help curb the surplus that has pressured prices since 2021. BloombergNEF expects the excess permits to start declining in 2026 and be fully depleted by 2030. Combined with challenges in cutting industrial emissions, this could drive UK carbon prices higher. (Source: Bloomberg)
• The EU plans to allocate some carbon market allowances to help fund industrial decarbonization as part of next year’s rule revisions. On Wednesday, it announced a €100 billion Industrial Decarbonization Bank to support cleaner industries while maintaining global competitiveness. The bank will be financed through existing funds, including the Innovation Fund, InvestEU, and revenues from the EU Emissions Trading System (ETS), without adding extra allowances to the market. Starting in 2025, €20 billion will come from the Innovation Fund, with up to €30 billion in voluntary contributions from member states and at least €25 billion from allowances auctioned between 2028 and 2037. Despite this, challenges remain in scaling clean industrial projects. (Source: Bloomberg)
Questions about the UK or EU ETS? Email us!
Wishing you all a good week ahead,
Grey Epoch Europe
+44 20 7072 3313
