Gas Market
UK gas prices moved higher yesterday, with the front-month August contract rising by 2.17p to settle at 84.20p/therm and the Summer 2026 contract gaining 1.3p to close at 85.04p/therm. The gains were driven by ongoing heatwave fears, which are expected to boost demand for cooling and overall energy consumption, as well as the need for stronger storage injections, particularly in Germany, where storage levels remain a key focus. UK gas demand yesterday was 152mcm, above the seasonal norm of 145.5mcm. Meanwhile, the UK gas system stayed well balanced on the day-ahead market, as higher cooling demand was offset by increased renewable generation and the return of over 1GW of nuclear capacity. The day ahead contract increased 0.15p to settle at 83.10p/therm.
Power Market
GB baseload power prices had a slightly mixed day, with the day-ahead price falling by 0.98% to £83.76/MWh on the back of a modest increase in renewable generation. Along the forward curve, movements largely mirrored those in the gas market, with the front month increased 1.6% or £1.2 to £75.2/MWh as the ongoing heatwave continues to drive up cooling demand across the UK and Europe.
Meanwhile, European carbon prices settled higher for the first time since last Thursday, though the market lacked clear direction as traders awaited the long-anticipated decision on US-EU tariffs, which ultimately did not materialise. The benchmark Dec-2025 EUA contract closed up 0.5% at €70.74 per tonne.
Oil Market
On Thursday, oil prices dropped roughly 2% as investors grappled with the broader implications of U.S. President Donald Trump’s tariff threats on global economic growth. Front-month Brent crude closed at $68.64 per barrel, slipping $1.55, or 2.21%. The decline followed Trump’s Wednesday warning of a potential 50% tariff on exports from Brazil, Latin America’s largest economy, though markets appeared less reactive this time, shrugging off the new tariff threats as investors bet the president would again step back from applying his most punitive duties. Still, policymakers remain concerned that such tariff moves could stoke inflationary pressures, and the oil market’s pullback reflects those ongoing trade-war anxieties.
Markets this morning
Energy markets are broadly flat this morning as the UK gas system remains well balanced. Despite higher-than-normal demand forecast at 153.03 mcm, the session opened 22 mcm long, suggesting comfortable fundamentals and steady supply. The front-month August gas contract is down slightly, by just 0.1p/th. Oil prices are also stable, with participants weighing the potential impact of further tariff announcements from President Trump, who sent a letter to Canada late on Thursday and warned EU nations to expect new tariff measures soon.
11 July 2025
