Energy Market Update – 05 August 2025
Markets saw a mixed day on Monday with gas prices firming slightly on supply issues and Asian LNG demand, while power prices dropped to multi-month lows due to elevated wind generation. Commodities were broadly softer.
UK gas prices posted small gains across the forward curve. The NBP Day-Ahead contract closed at 80.25p/therm, while September and Winter-25 prices moved up to 84.59p/therm and 93.18p/therm respectively. Gains were largely driven by reduced LNG regasification rates and an unplanned outage on the Norwegian Continental Shelf. Norwegian flows into the UK rose by 2mcm/day, with Langeled contributing 72mcm/day, though output via FLAGS dropped 2mcm/day and Vesterled remained quiet. UKCS production fell to 82.8mcm/day, down 4.7mcm from the previous session. Linepack was well supplied, closing 17.26mcm long. LNG sendout was subdued at just 8mcm/day, with no new cargoes expected for the UK. In continental Europe, LNG sendout declined sharply, particularly in France. Storage levels across Europe remain healthy, with UK sites averaging around 70–80% full. Strong cooling demand in Asia from persistent heatwaves is expected to maintain global LNG flows and add support to gas pricing.
UK power prices declined sharply, driven by a surge in wind generation caused by Storm Floris. The UK Day-Ahead baseload price collapsed to £16.79/MWh, down from £76.00 in the prior session, marking the lowest level since August 2024. Day-Ahead peakload dropped even further to just £3.52/MWh. Forecasts indicated wind would contribute close to 60% of the UK generation mix, reaching 17GW - well above the 6GW average seen in July. Gas-for-power demand was expected to rise marginally to 19mcm/day, while overall system demand fell to 140.1mcm. The power generation mix continues to be dominated by wind, with gas-fired CCGT units operating at reduced levels. Nuclear availability remains constrained, with several planned and unplanned outages persisting across Hartlepool, Torness, and Heysham units. Interconnector flows remain stable, especially from France and the Netherlands. In Europe, German and French Day-Ahead prices also declined, by 40% and 74% respectively, reflecting the widespread wind surge across the region.
In wider commodity markets, Brent crude eased to $68.76/bbl, down $0.91 on the day. EU carbon prices were lower, with the EUA Dec-25 contract settling at €70.85/tonne, while the UK ETS moved higher to £50.91/tonne. Coal markets were flat, with the ARA CIF Cal-26 contract closing at $111.93/tonne. Currency movements were modest, with GBP/EUR falling to 1.1489 and GBP/USD edging up slightly to 1.3283. A series of LNG deliveries into Northwest Europe, including from Malaysia, the US, Peru, and Russia, is expected to reinforce supply through the week, although mild LNG sendout figures indicate limited short-term impact on UK balance.