Energy Market Update – 06 August 2025
Markets were largely stable on Tuesday with minimal directional change. Sentiment remained neutral as traders monitored storage developments and modest supply adjustments.
UK natural gas prices showed little movement. The NBP Day-Ahead contract settled at 80.35p/therm, up marginally, while the front-month contract edged up to 84.86p/therm. The market remains finely balanced as storage dynamics continue to dominate sentiment. Europe-wide gas storage levels reached 70%, with one of the continent’s largest sites, Rehden in Germany, continuing to underperform at just 12% full. The operator has launched new capacity auctions, aiming to improve utilisation at the facility, which accounts for around 4% of total European storage capacity. UK system demand stood at 161.15mcm, a slight decline from the day before, while UKCS production eased to 83.2mcm/day. Norwegian flows increased slightly, with Langeled delivering 73.3mcm/day, while LNG sendout remained modest at 8mcm/day, with South Hook responsible for the bulk. Forecast gas-for-power demand dipped to 18mcm/day due to higher expected wind output.
UK power prices fell despite rising gas prices. The Day-Ahead baseload settled at £68.22/MWh, with the front-month contract at £79.95/MWh and the front-season contract at £85.92/MWh. The surge in wind generation reduced reliance on gas-fired units. Renewables were forecast to contribute around 35% of UK baseload on the day, up from 29% the day prior. Storm-driven wind capacity is expected to ease slightly later this week but remain above seasonal norms. Interconnectors continued to supply a stable share of the UK power mix, helping balance demand amid ongoing nuclear outages. Several nuclear reactors remained offline, including both Hartlepool units and multiple units at Heysham, with extended outages expected through August and beyond. On the continent, French and German power prices were relatively stable, with cooler weather and improved hydro and nuclear output moderating price movements.
In the wider commodity complex, oil and coal both slipped. Brent crude dropped to $67.64/bbl, while coal prices eased to $111.69/tonne. European carbon markets saw a small rebound, with EUA Dec-25 contracts rising to €71.59/tonne and UK ETS allowances at £51.05/tonne. In global gas markets, Asian LNG demand remained firm with JKM at $12.06/MMBtu. TTF and NBP spot gas traded at $11.25 and $10.69/MMBtu respectively. Currency markets were quiet, with GBP/EUR at 1.1504 and GBP/USD at 1.3299.