Energy Market Update – 07 July 2025
Gas and power markets traded slightly lower yesterday as strong supply fundamentals and milder weather forecasts pressured prices. Gas prices dipped across the curve, while power prices saw limited movement despite continued volatility in renewables and ongoing nuclear constraints.
Natural gas prices declined on Monday, continuing the downward trajectory seen late last week. The UK NBP day-ahead price settled at 78.50p/therm, a modest drop of 0.50p, while the Dutch TTF front-month contract eased to €33.50/MWh. Weaker demand expectations were a key driver as cooler weather temporarily returned across much of Europe, though forecasts suggest this will be short-lived with high pressure expected to bring warmer conditions later in the week. Norwegian flows remained robust, with total nominations reaching 321 mcm/day—levels not seen since April—and UKCS output rising to 94.10 mcm/day. LNG sendout was stable at 9 mcm/day despite no new British LNG deliveries scheduled in the immediate term. European storage levels climbed to 60.29% full, closely tracking 2022 levels, though German and Dutch facilities continued to lag at 52.28% and 49.34% respectively. Market participants remain attentive to Norwegian maintenance planned for August and September, and geopolitical developments, particularly around EU-US trade talks and the status of tariffs following recent US legislation, could inject volatility in the coming weeks.
In the power market, UK day-ahead baseload prices fell sharply to £35.00/MWh, down from £61.92, reflecting a surge in wind output, which rose from 6.6 GW to 12.2 GW, and offset a decline in interconnector imports. The UK became a net exporter of electricity to France, Belgium and the Netherlands. Despite a temporary pullback in wind from 9 July, solar generation is expected to remain strong through to at least 22 July, sustaining high renewable input into the mix. The gas-for-power component dipped to just 3.8 GW, about 13% of the total generation. Outages in the nuclear fleet remain significant, with France’s Golfech-1 reactor offline due to high river temperatures, and multiple UK reactors undergoing maintenance. While this has limited nuclear availability, improved renewable generation has softened its impact. Forward contracts saw a mixed picture, with UK front-month power trading at £72.45/MWh and Winter 25 around £83.71/MWh.
In other commodities, Brent crude eased slightly to $68.30/bbl amid expectations of increased OPEC supply and lingering uncertainty over US tariff policy. The market is closely watching whether the EU can finalise a trade agreement with the US ahead of the 1 August deadline, as new tariffs could impact global economic growth and energy demand. European carbon prices declined modestly, with the EUA Dec-25 contract settling at €71.67/tonne. Coal prices softened slightly, with the ARA CIF Cal-26 benchmark closing at $110.75/tonne, reflecting muted industrial demand and steady stock levels across European terminals.