Small Business Energy Market Update
20 June 2017
What happened to gas prices last week?
Over the past week, we have seen drivers for both increases and decreases in prices. Increases have been caused by, increasing Oil prices on the back of OPEC leaders Saudi Arabia vowing to make significant cuts to Asia, and a partial export halt in Libya. We have also seen drops in Norwegian flows following outages, ab shirt UK system and a depreciating Pound against the Euro following the backlash from the UK General Election. Main factors promoting decreases in prices have been very warm weather conditions in the UK, and interconnector maintenance increasing readily available supply in the UK. Falling Oil prices have also played a part, as increases in global inventories and doubts over whether OPEC will have the ability to implement their supposed cuts weighed on prices.
UK Gas prices have increased this morning, following big news surrounding the UK’s Rough storage. UK temperatures are set to remain hot today and tomorrow, turning cooler towards the end of the week. This cool will only be for a small period, before warm weather returns for July. The UK system is around 18mcm short this morning, highlighting increasing demand. Visund plant is experiencing an unplanned outage. Langeled is having to ramp up today, as the Dornum and Emden outage power on. This morning, Centrica has announced that the UK’s largest storage facility Rough will be permanently closed. Cushion Gas is expected to take around 3 winters to empty out of Rough, offering support to the curve this morning.
What specifically affected prices?