Energy Market Update - 01 September 2025
Gas and power softened as healthy storage and firm LNG offset Norwegian maintenance. Weekend wind depressed spot power, while geopolitics added only a limited risk premium.
Natural gas edged lower into month-end as storage progress and steady LNG weighed against reduced Norwegian flows. EU inventories are about 77.3% full and trending towards the lowered winter target. Norwegian output fell to 255 mcm/day on Friday versus 318 mcm/day at the start of the session, with nominations this morning around 235 mcm/day as the heavy September maintenance slate ramps up. UK-directed flows dipped by 1 mcm/day to 19 mcm/day after Vesterled returned to zero. LNG send-out is stable near 8 mcm/day (South Hook ~5 mcm/day; Isle of Grain boil-off; Dragon inactive), with additional Northwest European arrivals expected to keep the system comfortable. Gas-for-power demand for day-ahead is forecast at 27 mcm/day (up 4), the weekend at 14 mcm/day (up 2) and week-ahead-next-week at 28 mcm/day (down 2) on changing wind conditions. Prices reflected the softer tone: TTF front month settled at €31.62/MWh and is around €31 this morning; NBP front month closed at 77.83p/therm with NBP spot near 80p/therm. Positioning also leant bearish after sizeable fund length reductions through August. Geopolitically, Russian drone strikes over the weekend disrupted Ukrainian power supplies and Kyiv signalled potential escalation if talks do not progress, though this has not materially lifted near-curve risk so far.
UK power tracked gas and fundamentals. Improved wind over the weekend pulled the base spot down to about £49/MWh from the mid-£80s late last week. On the curve, the UK front-month baseload eased to roughly £73/MWh, while the front season ticked up to around £82/MWh, leaving the power curve more resilient than gas. Near-term volatility is expected as wind output fluctuates over the coming days; nuclear availability should gradually improve as planned maintenance winds down, tempering CCGT requirements when renewables recover. Interconnectors continue to provide balancing flexibility into and out of Great Britain.
Broader commodities were mixed. Brent crude slipped to about $67/bbl as macro headwinds outweighed recent US inventory draws and new US tariffs on India. European carbon firmed slightly, with EUAs around €73/t. Global gas benchmarks were steady to softer: Henry Hub near $3.00/MMBtu, JKM around $11.22/MMBtu and the TTF equivalent close to $10.86/MMBtu. With storage advancing, robust LNG schedules and Norwegian maintenance largely pre-flagged, markets begin September range-bound and increasingly focused on winter temperature risk.