Energy Market Update – 29 July 2025
Gas and power markets edged higher on Monday, supported by geopolitical developments and macroeconomic optimism following a new US-EU trade agreement. Cooler weather and lower renewables also added support.
Natural gas prices gained across the curve, with the front-month NBP contract settling at 80.15p/therm, up from Friday’s close. The Winter-25 contract also rose, reaching 91.73p/therm. Early losses in the European gas market reversed during the day, with the market reacting to political signals from a joint press conference by US President Trump and UK Prime Minister Starmer. Notably, the President shortened his ceasefire deadline in the Russia-Ukraine conflict from 50 days to just 10–12, implying potential sanctions if progress isn’t made - this shift was interpreted as a signal of growing tension in US-Russia relations. Meanwhile, cooler than seasonal temperatures and lower wind speeds lifted UK gas demand above normal levels by around 24mcm. The UK system opened short, which provided further upward price pressure. Storage levels across Europe remain diverse, ranging from 42% in Hungary to 87% in Portugal.
UK baseload power followed gas prices higher, as reduced output from renewables kept gas-fired generation elevated. The Day-Ahead baseload contract rose to £82.81/MWh, with the forward Q4-25 contract settling at £83.22/MWh. CCGT remained the dominant contributor to the UK power stack, driven by ongoing nuclear outages and subdued wind and solar generation. Imports became the largest single contributor to the UK power mix, reflecting increased interconnector flows from continental Europe. Forecasts from Elexon suggested this trend would continue in the near term due to limited renewable generation. Elsewhere, German and French power prices also increased modestly, with the German Win-25 base at €92.54/MWh and French Win-25 at €77.99/MWh.
In wider commodities, oil prices rebounded slightly on geopolitical concerns, with Brent rising to $70.04/bbl and WTI to $66.71/bbl. Market attention was focused on Trump’s tightened timeline for a Russia-Ukraine ceasefire and the upcoming US Fed interest rate announcement. Carbon markets were mixed: EUA Dec-25 slipped to €70.65/tonne, down €0.97, while UK ETS Dec-25 climbed £2.54 to £58.95/tonne. Coal prices rose strongly, with ARA CIF Cal-26 up 2.82% to $111.47/tonne. Currency markets weakened slightly, with GBP/USD slipping to 1.3355, and EUR/USD falling to 1.1654. LNG deliveries to Northwest Europe remained robust, with multiple cargoes from the US, Angola, and Russia scheduled to arrive this week. System demand in the UK stood at 159.13mcm/day, down slightly week-on-week, while UKCS production held at 81.20mcm/day. Notably, the TTF August contract in USD terms traded at $11.25/MMBtu, with the Asian JKM benchmark slightly higher at $11.92/MMBtu.