Energy Market Update – 18 July 2025
Energy markets firmed slightly on Thursday as prompt gas and power prices moved higher, buoyed by ongoing Norwegian supply outages and a rebound in UK gas imports. LNG sendout eased, but storage injections remained subdued.
Gas prices showed modest gains across most front contracts as reduced Norwegian flows continued to dominate the supply picture. Combined outages at Nyhamna and Kollsnes processing plants amounted to over 90mcm/day, although nominations via the Langeled pipeline rose to 52.1mcm/day, helping partially offset the disruption. UK system demand was reported at 150.42mcm on Thursday, down from 157.25mcm the day prior, while storage withdrawal activity remained marginal. Notably, UK storage levels were significantly lower year-on-year at just 9.0GWh compared to 18.5GWh in 2024. However, LNG sendout fell to 9mcm/day, down from 15mcm/day the previous day, as only South Hook and Isle of Grain terminals were active. Two LNG vessels are expected to arrive by 27 July. NBP Day-Ahead gas settled at 84.90p/therm, up 1.90p on the day, though the front-month contract eased slightly to 82.09p/therm. Forward seasonal prices remained broadly stable.
UK power prices also climbed, with the Day-Ahead baseload contract rising to £89.89/MWh, up £2.99 from Wednesday. The increase was supported by tight gas supply and low renewable generation, with output from wind and solar dropping to just 19% of the generation mix. Combined Cycle Gas Turbines (CCGT) remained dominant, contributing 34.6% of supply. Forward contracts saw mixed movement, with Winter 2025 remaining unchanged at £85.62/MWh while Summer 2027 rose to £71/MWh. Peak load contracts moved similarly, with Winter 2027 gaining £2.75 to £80/MWh. Meanwhile, nuclear output remained affected by a series of planned and unplanned outages, most notably at Hartlepool and Heysham, where several units were offline or running at reduced capacity. Wind and solar forecasts point to an uptick over the weekend, with expectations of up to 11GW of output, which could alleviate pressure on thermal generation next week.
Elsewhere, Brent crude strengthened by $1.00 to settle at $69.52/bbl, supported by stabilising global equity markets and a modest rebound in risk appetite. Coal prices slipped, with the ARA CIF Cal-26 contract falling $0.85 to $111.38/tonne. Carbon markets were softer, with EU Allowances (EUA Dec-25) dropping €0.76 to €70.55/tonne and UK ETS prices also declining to £50.98/tonne. Currency markets were steady, with GBP/EUR rising slightly to 1.1569, while GBP/USD edged down to 1.3415.