Energy Market Update – 28 July 2025
Gas and power markets saw mild increases at the start of the week, supported by lower temperatures, steady LNG sendout, and reduced renewable generation. Commodity markets were mixed, with oil slipping and carbon firming.
Natural gas prices rose modestly across the curve, despite balanced supply and demand fundamentals. The NBP Day-Ahead contract closed at 78.55p/therm on 25 July, up 1.00p from the previous session, while the front-month August contract was last offered at 78.62p/therm. UK system demand dropped to 163.77mcm/day, down 5.23mcm from the day before, while UKCS production also declined to 81mcm/day. Imports from Norway via Langeled held near 73.6mcm/day, and LNG sendout remained steady at 10mcm/day, with South Hook nominating 7.4mcm/day and Isle of Grain at 2.9mcm/day. No new LNG cargoes were expected at UK terminals, though multiple vessels were set to arrive in Zeebrugge, Gate, Wilhelmshaven, and Montoir, with significant volumes from the US and Russia. European hub prices mostly dipped, with TTF and PSV down to €81.40/MWh and €89.39/MWh respectively, while storage levels across Europe ranged from 38% in Denmark to 86% in France. UK storage remains well below average, with Rough at just 7% full.
UK power prices were mixed, with spot contracts falling while forwards gained on rising gas input costs. The Day-Ahead baseload fell to £77.79/MWh, a decline of £3.61 from the prior session. Conversely, October and Q4-25 contracts moved higher, with Q4-25 offered at £84.03/MWh. Peakload prices mirrored these movements, with the Day-Ahead peak settling at £73.23/MWh. CCGT continued to dominate the UK power stack, averaging over 12GW during daytime hours across the last 15 days. This dominance was reinforced by extended nuclear outages, including at Hartlepool and Heysham, where capacity losses exceeded 600MW on multiple units. The impact of reduced nuclear and wind availability was partially mitigated by stable interconnector flows from France and Belgium. Wind generation is forecast to recover from the end of July, with total renewable output expected to reach nearly 15GW by 3 August.
In commodities, Brent crude fell to $68.44/bbl, down $0.74 on the day, weighed by weak demand signals despite geopolitical calm. Coal prices firmed slightly, with API2 Cal-26 rising to $110.69/tonne. Carbon markets gained, with EUA Dec-25 up €0.46 to €71.34/tonne, while the UK ETS dipped slightly by £0.20 to £50.10/tonne. Gas-for-power demand is forecast to rise by 13mcm/day in the UK due to weakening wind conditions early in the week, before easing again into August. Meanwhile, currency markets softened, with GBP/EUR falling to 1.1474 and GBP/USD to 1.3434.