Energy Market Update – 25 June 2025
Energy markets recorded steep declines across gas and power on 24 June, largely driven by a US-brokered ceasefire between Israel and Iran which eased geopolitical tensions. Oil and carbon prices also moved lower, while LNG imports into Europe continued at pace.
UK gas prices experienced one of the sharpest daily losses in recent memory, with the Winter 2025 contract dropping by 11.6p/therm, or 0.4p/kWh—the largest fall for a front-season contract since August 2023. The ceasefire announcement immediately pushed prices below the key psychological threshold of 100p/therm. Though initial doubts emerged after reports of renewed missile fire between the two countries, a return to calm later in the day helped solidify the price correction. Additional downward pressure came from increased Norwegian flows, with Langeled nominations into the UK reaching 59.5mcm/day on 25 June, up from 52.5mcm the previous day. This improvement supported injections into UK storage, with net flows turning negative and around 5mcm directed into medium-range storage sites. Nevertheless, some upside support remained from a reduction in wind generation, which raised gas-for-power demand. On the prompt, the NBP front-month contract was last seen trading at 83.70p/therm after settling at 81.60p/therm the previous session. European gas storage levels now stand at 56% full, and market participants continue to monitor storage injection rates as regulators consider extending flexibility in meeting the 90% winter target.
UK power prices also declined significantly, in line with the gas market downturn. The UK baseload front-month contract dropped by £7.55 to £74.15/MWh, though it rebounded modestly in the morning session to £76.00/MWh. Losses were also seen further along the curve, with the Winter 2025 baseload contract falling by £7.22 to £87.19/MWh before ticking higher by £0.75 in early trading. The broader fall in power prices was driven by reduced fears of energy supply disruption via the Strait of Hormuz, a critical chokepoint for global LNG and crude shipments. However, the power market did not fall as sharply as gas, as forecasts showed low renewable output for the week and nuclear generation in France facing limitations. EDF reported that several nuclear reactors along the Rhone River are reducing output due to high river temperatures impacting cooling capacity. In the UK, wind generation was forecast to increase from 5GWh/h to 12GWh/h between 24 and 25 June, helping to reduce gas-for-power demand.
Oil prices also declined for the third consecutive session, with Brent crude falling by over 12% in total since Friday 19 June. The benchmark contract settled at $64.75/bbl on Tuesday, down from $73.67/bbl, as market fears over disrupted Middle Eastern supply routes eased following the ceasefire. European carbon markets were mixed, with EUA December 2025 prices ticking up slightly to €73.54/tonne, while UK ETS allowances rose to £51.27/tonne. Meanwhile, coal prices softened, with the ARA CIF Cal-26 contract falling to $108.01/tonne. LNG imports into northwest Europe remained high, with multiple large-scale deliveries from the US, Qatar, and Russia scheduled between 25 and 28 June, supporting supply security and helping to moderate price volatility.