Gas Market
UK gas prices fell to their lowest level in almost two weeks on Friday, with the front-month contract down 1.51p at 79.53p/therm, extending weekly losses to 4.35p/therm. The market came under pressure from a well-supplied system, supported by steady Norwegian flows and high wind generation. Prices dropped further late in the session after Bloomberg reported that the US and Russia were discussing a potential truce in Ukraine that would “lock in” Russian territorial gains from the 2022 invasion. The prospect of relaxed sanctions on Russian energy under such an agreement triggered selling across European gas markets. The planned meeting in Alaska will be a key focus for markets this week. On the prompt, losses in the Day-Ahead contract were limited to just 0.30p/therm, as much warmer weather and lower wind forecasts for next week are expected to lift both cooling demand and gas-for-power demand.
Power Market
GB baseload power prices fell on Friday, with the front-month contract down £0.88, or 1.1%, to £77.25/MWh, tracking bearish momentum in gas. Spot prices, however, rose as the Day-Ahead contract gained 36.8% on lower wind generation forecasts for Monday. Warmer, low-wind conditions this week could drive cooling demand and potentially trigger nuclear output cuts in France, with EDF warning capacity could fall by 7.7GW.
European carbon allowances closed at their highest level in more than six weeks, with the 2025 EUA contract up 2% on the day and 3.1% on the week at €73.21/tonne. Gains were driven by continued strong buying that pushed prices to key technical resistance before late-session weakness in energy markets on news of a possible US-Russia summit.
Oil Market
Oil prices held steady on Friday as markets looked ahead to an anticipated meeting in the coming days between Russian President Vladimir Putin and U.S. President Donald Trump. Brent crude inched up 16 cents, or 0.2%, to settle at $66.59/bbl, while WTI closed flat at $ 63.88/bbl. Despite the modest daily gain, Brent ended the week down 4.4% and WTI 5.1%, marking their steepest weekly losses since late June amid concerns over a tariff-driven slowdown in the global economy. The potential Trump-Putin talks have fuelled speculation about a possible diplomatic resolution to the war in Ukraine, which could pave the way for eased sanctions on Russia, at a time when trade tensions between Washington and buyers of Russian oil have been escalating.
Markets This Morning
Gas prices are higher across the curve, with the NBP Day-Ahead rising to 78.00p/therm on lower Norwegian imports following a compressor failure at Ormen Lange. Nominations from Norway to the UK are down 10 mcm/d, while Gas-for-Power demand is forecast to increase by 5 mcm/d as wind generation forecasts have been revised lower. Near-curve NBP contracts are up an average of 1.26p/therm amid tighter system conditions. Oil prices are lower, extending last week’s 4% decline, as markets focus on upcoming US-Russia talks on the war in Ukraine. OPEC+ agreed on Sunday to raise September output by 547,000 bpd, continuing its accelerated production increases to regain market share. Front-month Brent crude is down 29c at $66.30/bbl.
11 August 2025
