ICE U.K. nat gas Aug. futures settle at 79.79 pence/therm

ICE U.K. nat gas Aug. futures settle at 79.79 pence/therm

The ICE UK natural gas futures for August 2025 settled at 79.79 pence per therm on July 2, 2025. This price reflects the ongoing volatility and uncertainty in the European gas market, driven by factors such as supply outages and geopolitical risks. The recent outage at Ichthys’s LNG export plant in Darwin, Australia, has contributed to the upward trend in UK natural gas futures, as Asian clients compete for limited export supply.

The current price is a 2.48% decrease from the beginning of 2024, according to trading data on a contract for difference (CFD) that tracks the benchmark market for UK natural gas [2]. Despite this decrease, the market is expected to trade at 87.05 GBp/Thm by the end of the current quarter, according to Trading Economics global macro models and analysts' expectations [2].

The price movement is also influenced by the broader energy landscape, where natural gas plays a dual role as both an energy source and a critical raw material for producing essential chemicals. For instance, chemical company BASF has entered into a strategic ten-year agreement with Equinor to secure an annual supply of up to 23 terawatt-hours of natural gas, equivalent to two billion cubic metres [1]. This deal will provide a significant portion of BASF's natural gas requirements in Europe and aligns with the company's sustainability goals.

The UK gas market has seen significant fluctuations in recent months, with prices reaching an all-time high of 800 in March 2022. However, the current price of 79.79 pence per therm indicates a more stable market, albeit one that remains sensitive to global supply disruptions.

The ongoing hurricane season in the Gulf of Mexico and the return of the US Freeport LNG plant have mitigated some supply concerns, but the market remains cautious. The fast-tracking of renewable sources like wind and solar has also driven up energy costs, making it more challenging for other energy projects, including natural gas, to secure funding and approval [3].

The call for action from EQT CEO Toby Rice underscores the urgency of addressing regulatory hurdles that hinder natural gas project approvals. Rice has advocated for reducing approval times to boost the competitiveness of U.S. energy and provide a more affordable and reliable energy solution [3].

In conclusion, the ICE UK natural gas futures for August 2025 settled at 79.79 pence per therm, reflecting the complex interplay of supply, demand, and regulatory factors in the global energy market. As the demand for electricity from AI data centers continues to rise, streamlining the approval process for natural gas infrastructure projects is essential to ensure energy security and economic competitiveness.

References:
[1] https://finance.yahoo.com/news/basf-enters-long-term-natural-151055561.html
[2] https://tradingeconomics.com/commodity/uk-natural-gas
[3] https://www.ainvest.com/news/eqt-ceo-warns-losing-ai-race-doesn-cut-permit-times-natural-gas-projects-2507/