Small Business Energy Market Update
Tuesday 13th February 2018
What has happened to Gas prices today?
Last Wednesday, news broke that there was an issue on a Valve on the Forties pipeline which flows gas and Oil into the UK. This resulted in the closure of the pipeline and flows were stopped. Gas prices rocketed on the back of this climbing over 2p/therm. Later that afternoon, the pipeline operator announced that corrective maintenance would be completed overnight with flow resumed the following morning. Prices reacted and trended downwards.
For the past week, the biggest impact on the market has been colder weather forecasts. The Gas market has reacted in an extremely volatile manner based on new models showing continuously cooling temperatures. This is likely to persist throughout the remainder of February leading to increased gas consumption.
Figures released late last week showed that the US Oil Production had increased, against forecast views. An expectation of a drop in 1.1million barrels actually materialised into a 1.8million barrel net gain helping the price of Brent Crude fall to below $63barrel.
Despite an increase in cold weather and gas demand, the UK has remained well supplied. Only 2 days in the last 3 weeks have opened with the UK undersupplied which has proved a positive note for the gas price.
What specifically affected prices in the past week?
Bullish Factors (Upward Pressure)
- Colder weather forecast
- Forties Pipeline & Gas Flow Restriction
Bearish Factors (Downward Pressure)
- Long UK system
- Cheaper European Coal Prices
- Cheaper Brent Crude