Energy Prices Ease as Supply Outlooks Improve Across Gas, Power, and Oil Markets

Gas Market

NBP gas prices traded within a narrow range for most of Monday as the market assessed steady weather forecasts and gas-for-power demand. However, prices softened late in the session following analyst reports suggesting the EU is on track to meet its October 1st gas storage target, supported by reduced Chinese LNG demand. Chinese imports have declined 20% year-on-year over the first half of 2025, while EU LNG imports have risen by 21% over the same period, boosting injection rates into European storage. On this prospect of higher storage, the Winter-25 NBP contract fell by 1.3p to 90.5p/therm. On the prompt, the Day-Ahead contract rose by 1.25p as an unplanned outage at the Barrow North terminal tightened UK system supply.

Power Market

GB baseload power prices declined on Monday, tracking losses in the gas market. The Winter-25 contract fell by £0.75 (0.9%) to £83.63/MWh, as expectations that the EU will meet its gas storage targets eased concerns over winter supply. On the prompt, the Day-Ahead contract dropped by £1.25 to £81.75/MWh, driven by forecasts of stronger wind generation over the next two weeks. European carbon prices also weakened for a fourth consecutive session, hitting a one-week low amid broader softness in natural gas markets. The Dec-25 EUA contract settled down 42 cents at €69.82/tonne, slipping below a key support level as gas prices declined in the afternoon.

Oil Market

Oil prices slipped slightly lower on Monday as fresh European sanctions on Russian oil were viewed as largely symbolic, with limited expected impact on global supply. Brent crude futures eased by 7 cents, or 0.1%, to settle at $69.21 a barrel. The decline followed the EU’s approval of an 18th sanctions package targeting Russia, which included measures against India’s Nayara Energy, an exporter of refined products made from Russian crude. However, the market remains unconvinced of any meaningful disruption, as the new restrictions are seen as difficult to monitor and enforce. Traders largely expect Russian-origin supply to continue reaching global markets through alternative channels.

Markets This Morning

The UK gas system opened 10.9mcm short this Tuesday morning, pushing prices slightly higher as near-curve contracts gained an average of 0.41p/therm. The market remains supported by ongoing maintenance at Norway’s Troll field, which has been extended until 24th July and is currently reducing flows by 22mcm/day, around 17% of the field’s total capacity. Meanwhile, oil prices have fallen this morning amid growing demand concerns, with the upcoming August 1st U.S. tariff deadline weighing on sentiment. Front-month Brent crude is down 53 cents at $68.68/bbl.