Energy Market Update – 14 July 2025
Gas prices rose modestly amid warmer-than-average weather and tighter LNG supply, while UK power prices gained on stronger gas-for-power demand. Oil and coal prices climbed; carbon was mixed.
Natural gas markets moved upward across the curve, with the UK NBP front-month contract (August) settling at 85.27p/therm, up 1.07p from Friday, and the day-ahead price reaching 84.00p/therm. The rally was driven by continued high temperatures, which sustained elevated gas-for-power demand across Europe. The UK system demand climbed to 151.21 mcm/day, up from 142.68, as wind generation fell and air conditioning demand rose. Flows from Norway via Langeled surged to 60.3 mcm/day, contributing to a stable supply picture, while LNG sendout decreased to 10 mcm/day amid limited new deliveries. The next cargo is expected at South Hook on 15 July. European storage levels showed varied progress, with UK storage at 69%, France at 84%, and Germany trailing at 36%, reflecting regional differences in injection strategies.
UK power markets reflected similar upward movement, driven by falling renewable output and continued gas reliance. Day-ahead baseload prices declined slightly to £77.88/MWh from £83.76 on Friday, while August gained to £75.90/MWh. Baseload Q4-25 closed at £85.62/MWh, up £1.04, and Winter 25 traded at £86.66/MWh. Peak contracts also increased, with Q4-25 reaching £102.00/MWh. Wind generation is forecast to remain below seasonal norms this week, while solar output has increased, particularly in Germany, where production is expected to exceed 13GW. UK nuclear availability remains constrained, with several planned and unplanned outages affecting output, including units at Hartlepool, Torness, and Heysham. Interconnector imports from France and the Netherlands provided steady supply support, while market participants welcomed the government’s decision to abandon zonal pricing reforms, though uncertainty remains around future regulation.
In broader commodities, Brent crude rose to $70.36/bbl, buoyed by resilient global demand and limited new supply additions. Coal prices also climbed, with the ARA CIF Cal-2026 contract closing at $117.14/tonne. Carbon markets were mixed: the EU Allowance (EUA) December 2025 contract edged down slightly to €70.55/tonne, while the UK ETS equivalent rose to £47.51/tonne. Currency movements were subdued, with the GBP/EUR rate at 1.1551 and GBP/USD at 1.3499, both slightly weaker on the day.