Energy Market Update – 11 July 2025
Energy prices remained broadly stable yesterday, with modest gains in gas and power driven by hotter weather forecasts and steady demand. Crude oil and coal prices advanced, while carbon markets eased.
European gas prices hovered in a relatively narrow range, with the UK NBP August-25 contract settling at 84.00p/therm and TTF equivalent at €35.15/MWh, both broadly unchanged on the day. The spot NBP contract rose to 84.20p/therm, while TTF spot climbed to €34.91/MWh. Warmer temperatures across Europe and North Asia are expected to lift cooling demand in the coming days, contributing to higher gas-for-power use. UK system demand was near seasonal norms, supported by a stable 9 mcm/day LNG sendout. A notable increase in linepack and robust Norwegian flows maintained system length, while scheduled outages at the Langeled and Vesterled pipelines remain a medium-term supply risk. EU storage levels reached 61.95% fullness, slightly trailing the five-year average, with Germany and the Netherlands still below at 55.17% and 50.53% respectively.
In the UK power market, baseload spot prices rose to £86.30/MWh, tracking gains in the gas market. The front-month contract for August rose to £75.90/MWh, while Q4-25 settled at £85.62/MWh. Wind output remains weak, although solar generation has improved, helping to meet increasing cooling-related demand. A further rise in temperatures, up to 4–5°C above seasonal norms, is expected to sustain demand into the weekend. The government’s announcement that it will not proceed with zonal pricing reforms maintains the current national pricing framework, easing uncertainty in longer-term forecasts. Interconnector flows from France and the Netherlands continued to offer steady supply support, while UK nuclear capacity is stable, with French nuclear output also forecast to remain near current levels.
Elsewhere, oil prices rebounded slightly after retracing from recent highs. Brent crude remained close to $69/bbl, while WTI climbed to $68.45/bbl, buoyed by resilient demand and limited downside despite additional OPEC supply. In coal markets, the ARA CIF Cal-2026 contract jumped to $117.13/tonne, gaining 5.76% week-on-week on the back of firm Asian demand. European carbon prices softened, with EUA December 2025 contracts falling to €70.55/tonne and the UK ETS down to £54.88/tonne. The retreat was driven by reduced industrial activity and profit-taking amid weak short-term fundamentals. Currency markets were stable, with EUR/USD at 1.1683 and EUR/GBP at 0.8657.