Energy Market Update – 10 June 2025
Markets eased slightly across the board, with downward pressure from lower demand forecasts and healthy supply fundamentals counteracting the impact of Norwegian maintenance and LNG supply tightness.
During Monday’s trading European gas benchmarks dipped as NBP front-month contracts closed near 83.50 pence per therm while TTF day-ahead fell to around €35.60 per megawatt hour. This softness reflected firm supply fundamentals, including a surprise postponement of maintenance at the Oseberg field, which added roughly 13 million cubic metres of gas to day-ahead availability. Norwegian pipeline nominations eased by about 8 mcm to Germany and the Netherlands, though UK imports slipped by only 1 mcm. Meanwhile, EU storage levels have climbed to just over 51% of capacity, up from lows earlier this year, easing concerns over summer tightness. However, planned maintenance at US LNG export terminals could see transatlantic flows tumble from recent peaks near 2.5 billion cubic metres per week to lows of about 0.85 billion cubic metres, introducing a potential risk to supply balances through July. The boost to stocks and deferred outages has taken immediate pressure off prices, but the looming dip in LNG volumes highlights a supply vulnerability that may support prompt-season gas further along the curve.
UK day-ahead baseload contracts softened to £77.50 per megawatt hour as abundant renewable output and subdued demand eased reliance on gas-fired generation, which accounted for roughly 20% of the supply mix. Temperatures are forecast to stay above seasonal norms into late June, with wind generation expected to peak mid-week before tapering—supporting renewables but also adding short-term volatility. The return of Hartlepool 1 from maintenance tomorrow and Heysham next week will bolster nuclear capacity, reducing gas burn at peak times, while the North Sea Link interconnector is operating at its full 1.4 GW capacity, enabling increased flows to the continent and helping to balance UK supply. Nuclear restarts and strong interconnector exports apply downward pressure on power, though variable wind output keeps prompt markets sensitive to swings in demand.
Oil prices firmed on optimism over US–China trade talks, with Brent crude rising to about $67.04 per barrel. This bullish mood also lifted API 2 coal to around $106.55 per tonne as utilities secured fuel ahead of potential seasonal demand spikes. European carbon allowances climbed to approximately €74.23 per tonne amid expectations of tighter emissions targets and possible coal-to-gas switching, while UK ETS permits settled near £51.41 per tonne. Sterling remained close to €1.19/£ and $1.35/£, limiting significant shifts in import costs. The improving trade outlook underpins oil and coal, feeding through to carbon markets as participants foresee higher fossil-fuel generation if industrial activity picks up, while currency stability has muted swings in European import prices.