Energy Market Update – 07 August 2025
Gas and power prices dropped across the board yesterday as healthy supply and subdued demand weighed on the market. Oil and carbon also continued their recent downward trend.
UK natural gas prices declined again, led by the NBP Day-Ahead contract which settled at 78.80p/therm, down 1.55p from the previous session. September and Winter-25 contracts also softened, closing at 82.11p/therm and 90.83p/therm respectively. Norwegian supply remained steady, with flows to the UK totalling 87mcm/day, up 8mcm, supported by increases through both FLAGS and Langeled. UKCS production rose to 91.9mcm/day. Meanwhile, system demand fell sharply by 9mcm to 152.9mcm, as higher wind generation reduced gas-for-power needs. LNG sendout was steady at 9mcm/day, with South Hook contributing 6.5mcm and the Isle of Grain on boil-off only. EU gas storage stood just shy of 70% full. Further capacity auctions at Rehden, one of Germany’s largest storage sites, saw 3TWh successfully allocated, improving expectations that the facility may reach 45% fullness this season.
UK power prices saw a sharp decline in line with falling gas prices and higher renewable generation. The Day-Ahead baseload contract dropped by £13.77 to settle at £54.45/MWh. Peakload was even more volatile, closing at £41.82/MWh, down over £31 on the day. Front-month and seasonal baseload contracts also moved lower, with September and Winter-25 ending at £78.10/MWh and £83.86/MWh respectively. Gas-fired power generation fell as wind output remained above seasonal norms, but forecasts show this may dip below normal over the weekend. Nuclear availability remained constrained, with multiple units still offline at Hartlepool, Heysham, and Torness. Interconnectors continued to provide steady support to the UK grid, particularly from France and the Netherlands.
In wider markets, Brent crude slipped further to $66.89/bbl, down $0.75. Coal prices also eased, with the API2 Cal-26 contract at $110.55/tonne. Carbon prices followed suit, with EUAs closing at €70.99/tonne and UK ETS at £50.32/tonne. Global gas benchmarks weakened slightly, with JKM spot falling to $11.77/MMBtu and TTF spot to $11.09/MMBtu. Currency markets saw the pound fall slightly against the euro to 1.1472 but gain ground on the dollar to 1.3355. Forecast data suggests renewable generation will fall in the coming days, while system imbalances and system buy prices remain elevated, highlighting ongoing tightness in parts of the power market.