Energy Market Update – 30 June 2025
Energy markets remained broadly bearish at the end of last week, with natural gas and power contracts easing further amid weakening geopolitical tensions, healthy supply fundamentals, and limited demand pressure. A slight drop in wind generation led to some marginal upside in gas-for-power demand, but this was not sufficient to reverse the overall trend.
In natural gas markets, prices continued their downward trajectory as fears over Middle East supply disruption eased. The NBP front-season Winter 25 contract fell to 90.25p/therm, down 1.75p from the previous session and marking a 17.5% decline from the recent peak on 19 June. This movement was largely driven by decreasing risk premiums and ample European supply, with storage levels reaching 58.15% across the EU. Strong injection rates throughout June, supported by healthy LNG imports and moderate demand, have kept storage trends aligned with 2022 benchmarks. Notably, UKCS production was temporarily reduced due to a technical fault at the Barrow terminal, curbing supply by 6 mcm/day and providing some short-term price support. The NBP day-ahead price settled at 76.00p/therm, while the TTF spot closed at €32.70/MWh. LNG sendout remained stable with minor fluctuations; South Hook dropped slightly to 5.2 mcm/day, while Dragon remained inactive and Isle of Grain contributed 2.9 mcm/day. Planned Norwegian outages remain on the horizon, but immediate impact was limited.
Power markets followed the bearish sentiment seen in gas, with baseload curve contracts softening further. The UK baseload front-month contract (August 2025) remained unchanged at £82.80/MWh, while Winter 25 also held steady at £82.73/MWh. The decline in gas prices was the main downward driver, though high renewable output also weighed on the market. Renewable generation accounted for 53% of the UK power mix, slightly above the previous day’s figure, reducing reliance on gas-fired plants. Cross-border electricity exports dropped by more than 22%, indicating reduced demand from continental Europe. Although wind power output has been variable, it is forecast to fall below seasonal norms through early July, which could support gas demand for power generation in the near term.
In the broader energy complex, Brent crude prices were stable at $67.77/bbl, with no significant market-moving developments over the weekend. Carbon prices edged slightly higher, with EUA December 2025 contracts rising to €70.96/tonne, while UK ETS allowances reached £48.12/tonne. Coal prices also strengthened marginally, with the ARA CIF Cal-26 contract at $110.82/tonne, reflecting stronger demand expectations. In regulatory news, Ofgem’s new domestic price cap came into force on 1 July, reducing typical UK household energy bills by 7%, though this does not impact commercial pricing.