Energy Market Update – 31 July 2025
Gas and power prices saw modest upward movement, driven by firm LNG demand in Asia, reduced Norwegian flows, and tight UK power generation. Market focus turned to September contracts ahead of August expiry.
UK gas prices rose slightly, supported by strong LNG interest from Asia and fresh Norwegian outages. NBP front-month traded at 85.85p/therm, a small premium over expiring August contracts. European gas prices followed a similar pattern, with front-month TTF at €33.97/MWh and PEG at €33.92/MWh. Japan’s response to a significant Pacific earthquake, including temporary shutdowns at nuclear plants, heightened regional LNG demand fears, adding to European market bullishness. However, Japanese tsunami warnings were later lifted. UKCS output declined to 77mcm/day while imports via Langeled rose to 71.4mcm/day. LNG sendout remained stable, with new deliveries expected at Fos and Wilhelmshaven. EU storage levels stood at 67.99% full, in line with the five-year average, though Germany continued to lag at 60.18%. Additionally, geopolitical tensions increased after Qatar warned it might halt LNG exports to the EU due to proposed sustainability legislation.
UK power prices edged up with gas, although thin liquidity limited trading volume amid the European holiday period. The August baseload contract traded at £76.75/MWh. Low wind generation across northwest Europe sustained gas-for-power demand, with CCGT continuing to dominate the UK power mix. Wind speeds are forecast to improve next week, which may reduce thermal generation needs. Imports through interconnectors helped balance the system, comprising over 22% of GB supply. Day-ahead UK baseload settled at £83.00/MWh, with the front-quarter and Winter-25 contracts also firming. In France and Germany, nuclear output remained constrained, while renewable output remained below average, especially in the Netherlands and Germany.
Oil and carbon markets remained mixed. Brent crude rose to $73.24/bbl, supported by geopolitical risk and a rebound in demand expectations. WTI increased to $70.00/bbl. Meanwhile, European carbon prices fell slightly, with EUA Dec-25 at €72.86/tonne and UK ETS Dec-25 at £59.80/tonne. Coal prices dipped slightly, with ARA CIF Cal-26 at $112.33/tonne. Currency markets saw the pound slip against the dollar to 1.3235 and strengthen marginally against the euro to 1.1594. Warmer weather is forecast for the UK and central Europe into early August, potentially impacting demand patterns for both cooling and gas-fired generation.