Energy Market Update - 04 September 2025
Markets remained range-bound. Higher wind forecasts and steady LNG offset reduced Norwegian flows, while rising carbon lent mild support. Storage near 78% capped upside despite lingering geopolitical risks.
Natural gas traded narrowly. EU storage moved to about 78.3% full, reinforcing confidence in winter readiness. Norwegian nominations edged up to roughly 245mcm/day from 238mcm/day as planned maintenance continued, with no new outages reported. UK-directed receipts were steady and LNG send-out remained around 8mcm/day (South Hook the main contributor; Isle of Grain on boil-off). Positioning stayed bearish: investment funds’ net length fell to about 42TWh, the lowest in some time. Front contracts were little changed: TTF front month settled at €32.11/MWh (from €31.77) and traded near €32 this morning; NBP front month settled at 78.46p/therm (from 78.01p). NBP spot hovered around 78p/therm. Recent revisions show stronger continental wind, which should trim gas-for-power needs and keep prompt balances comfortable.
UK power followed gas but with prompt softness. Day-ahead baseload eased to about £77/MWh (from £79/MWh) on improved wind, while the front-month gained modestly to ~£74/MWh and the front season was ~£83/MWh. Near-term wind expectations were revised up, with Great Britain forecast well above average through the rest of the week and higher again next week, likely limiting CCGT burn. French industrial action briefly removed roughly 1GW of nuclear output on Tuesday and could extend, with a limited immediate effect so far; the strike also poses a near-term risk to Dunkirk LNG operations if prolonged. Overall liquidity on the curve remained thin, keeping movements modest.
Elsewhere in the complex, oil softened and carbon firmed. Brent traded near $68/bbl. EU carbon allowances rose to about €75/t and UK allowances also advanced, tightening the spread and lending some support to forward power and gas. Coal for 2026 delivery was broadly steady close to $104/t. Global gas benchmarks were little changed: Henry Hub around $3.06/MMBtu, JKM ~$11.23/MMBtu and the TTF equivalent near $11.01/MMBtu. With storage approaching 80%, Norwegian maintenance largely flagged, and LNG schedules robust on the Continent, markets continue to trade sideways while attention gradually pivots to winter temperatures.