Energy Market Update - 28 August 2025
Gas and power softened as storage builds, strong LNG inflows and scheduled Norwegian maintenance signalled ample supply; oil firmed on a US inventory draw while carbon was steady-to-softer.
European gas eased into the close on a quiet fundamental day. EU storage reached 76.43%, and a cluster of incoming LNG cargoes - particularly into Zeebrugge - kept downside pressure as volumes must flow into the grid rather than linger at terminals. Norwegian nominations slipped to 280.89 mcm/day amid the heavier September maintenance slate, and UK-directed nominations edged down to about 19 mcm/day after Vesterled fell back to zero. UK system demand rose to 114.9 mcm/day, with UKCS output around 64 mcm/day and the UK remaining a net exporter via IUK. LNG send-out was steady at 8 mcm/day (c.5 mcm/day South Hook; Isle of Grain boil-off; Dragon inactive). Commitment of Traders data added to the bearish tone as investment funds cut net length by ~17 TWh week-on-week to 65 TWh (well below the 20 June peak). The TTF front month settled at €32.55/MWh (from €33.46) and traded near €32 this morning, while the NBP front month closed at 80.43p/therm (from 83.13p). NBP day-ahead settled at 81.20p/therm. Near-term gas-for-power demand is forecast at 27 mcm/day for day-ahead (up 4), 14 mcm/day over the weekend (up 2) and 28 mcm/day week-ahead-next-week (down 2) as wind strengthens.
Power curves followed gas lower. UK day-ahead baseload cleared at £83.35/MWh, with September baseload at £76/MWh and the front season at £82.80/MWh. Higher wind output expected over the weekend and into mid-next-week is likely to pressure prompt prices again, while nuclear generation is set to ramp after planned maintenance. Interconnector activity continued to balance the GB system; exports to the Continent remained sizeable alongside low Norwegian import nominations to the UK. Despite the firmer renewable outlook, limited nuclear availability and ongoing North Sea works keep CCGT’s role elevated when wind dips.
In the wider complex, Brent rose to $68.05/bbl after a larger-than-expected 2.4 million-barrel draw in US crude inventories and as new US tariffs on Indian goods took effect. European carbon eased, with EUAs at €72.24/t and UK ETS at £51.86/t, while API2 Cal-26 coal slipped to $104.96/tonne. Global gas benchmarks were mixed: Henry Hub was $2.89/MMBtu, JKM M+1 $11.31/MMBtu and the TTF equivalent about $11.08/MMBtu. With robust LNG schedules expected to offset lower Norwegian flows as maintenance intensifies, and geopolitics temporarily on the back burner, markets remain range-bound with a modest bearish bias.