Energy Market Update – 15 July 2025
Gas and power prices softened slightly amid bearish sentiment, driven by mild demand and stable supply, while geopolitical tensions surrounding new US tariff threats kept oil and coal markets volatile.
European gas prices fell on Monday, reversing a recent bullish trend. The UK NBP front-month contract (August) closed at 83.75p/therm, down 0.60p, while the TTF equivalent slipped to €34.90/MWh. The UK system was 12 mcm long at the start of the session, with total demand at 140 mcm - 6 mcm below seasonal norms. Norwegian flows via Langeled remained firm at 56 mcm, supported by 55 mcm from UKCS, although an unplanned outage at Ormen Lange removed 7 mcm of capacity. Gas-for-power and heating demand were both subdued, with IUK exports at 34 mcm and storage injections at 17 mcm. LNG arrivals remained modest, with a US cargo expected at South Hook on 15 July. While near-term fundamentals were soft, geopolitical uncertainty dominated sentiment, as US President Trump threatened further sanctions on Russia and a 30% tariff on EU goods if no ceasefire agreement is reached by August.
In the UK power market, prices moved in a narrow range. Day-ahead baseload settled at £80.68/MWh, while the August front-month traded at £75.40/MWh, down £0.66 on the day. Q4-25 firmed to £85.83/MWh. A dip in solar output supported prompt prices, though this was largely countered by a surge in wind generation. Forecasts indicate continued high temperatures and low wind speeds, supporting gas-fired generation demand. UK system demand sat at 148.92 mcm, with CCGT maintaining the largest share of the power mix, while nuclear availability remained relatively stable. Interconnectors, particularly from France and the Netherlands, continued to play a key balancing role. German baseload power also eased, with the front-month contract at €81.00/MWh, mirroring the dip in gas and carbon markets.
In other commodities, Brent crude slipped to $69.21/bbl and WTI to $66.98/bbl as markets digested a softer-than-expected tone from Trump, despite threats of new tariffs on Russian and European imports. Coal markets dipped, with the ARA CIF Cal-26 contract at $114.68/tonne, although still up over 3.7% week-on-week amid steady Asian demand. European carbon prices edged down slightly, with the EUA December 2025 contract at €70.42/tonne. UK ETS prices moved against the broader trend, gaining to £55.56/tonne on expectations of tighter supply. Currency markets were stable, with GBP/USD at 1.3473 and EUR/GBP at 0.8667.