14 August 2025

Weekly Energy Market Update 

Outlook

The ongoing heatwave — which is both driving up demand and curbing output at gas and nuclear plants across Europe — has supported short-term markets this week, with baseload for delivery yesterday clearing at £90.99/MWh on N2EX. Longer-term contracts, however, have continued their gradual decline, pressured by a weaker US dollar, robust LNG and North Sea supply, and hopes that talks between the US, Russia and Ukraine could ease sanctions on Russian energy exports. At the same time, President Trump has warned Moscow of “severe consequences” if there is no progress toward peace. While he did not specify measures, these could include further restrictions on oil — and possibly gas — exports, a move that could spark a rebound after the recent sell-off. 



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General Context
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UK payroll employment declined for a sixth consecutive month in July, while wage growth held steady at 5% in the three months to June, highlighting the challenge for the Bank of England in timing its next interest rate cut. 


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Despite headwinds from US trade tariffs and a softening labour market, Britain’s economy grew 0.3% in the second quarter of 2025, slowing less than expected from a robust 0.7% expansion in the first quarter. 

Oil

Despite uncertainty surrounding the upcoming US-Russia peace talks and the potential for further tariffs and sanctions, Brent is trading lower week-on-week. Rising US oil inventories, coupled with the IEA’s forecast for higher global oil supply in 2025 and 2026, continue to weigh on prices. 

The EIA expects US crude output to peak at 13.41 million bpd in 2025 before easing to 13.28 million bpd in 2026 amid lower prices, while Brent crude is forecast to average $51/bbl next year, down from $58, following OPEC’s production increase. 
Oil

Gas & Power
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British Gas owner Centrica said today it will acquire National Grid’s Grain LNG terminal in partnership with US-based infrastructure investor Energy Capital Partners. Centrica’s 50% equity stake is valued at around £200 million, while approximately £1.1 billion of the overall transaction relates to project debt. The deal comes shortly after Centrica’s July bid to take a 15% stake in the planned Sizewell C nuclear power project. 

Wind

 

Industry leaders have welcomed approval for what could become one of the world’s largest offshore wind farms. The Berwick Bank project — a 4.1GW development with 307 turbines located about 38km off the Scottish Borders coastline — will now pursue a Contract for Difference before a final investment decision is made. 

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Four reactors at France’s Gravelines nuclear power station are being brought back online after a swarm of jellyfish clogged its cooling systems. Located in northern France, it is one of the country’s largest nuclear plants, drawing cooling water from a canal linked to the North Sea. The disruption adds to several other outages triggered by the ongoing heatwave and restrictions linked to elevated river temperatures. 

Current Prices
Market 07/08/25 14/08/25 Change
Brent (October) $67.50
 $65.75 ∨
UK Allowances (December 25) £50.25 £51.00 ^
UK Gas (NBP): September 25 81.50p 78.50p ∨
UK Gas (NBP): Winter 25 89.75p 86.25p ∨
UK Gas (NBP): Summer 26 81.75p 78.00p ∨
UK Power: September 25 £78.00 £75.00 ∨
UK Power: Winter 25 £84.00 £82.00 ∨
UK Power: Summer 26 £73.00 £72.00 ∨

UK Gas (NBP) - Rolling 12-Month Average
Screenshot 2025-08-14 at 13.01.01

 

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