Headlines:
- The US has announced new financial measures against Iran.
- Lack of confidence that the Strait of Hormuz will open soon.
- Low EU Gas Storage levels continue to be a concern.
Energy Overview
On Monday the 24th of August, Gas and Electricity Year Ahead Wholesale costs were higher than last week, but have seen modest losses this morning. Oil is unchanged at $91.
The US continues to focus on longer term financial pressures to persuade Iran to comply with demands. They announced an “economic D-Day” on Monday evening, including the isolation of those countries that refuse to cut ties with Iran. Energy markets appear to have gained little confidence from the new measures as China and Russia are likely to ignore the threats.
Global buyers of LNG are having to pay a premium to secure any available shipments, due to the disruption to supplies through the Strait of Hormuz. The EU for example, needs additional Gas to fill Storage which is just 63% full compared to 76% last year. The minimum Storage target is 80% by November, which currently seems unlikely to be met. This concern is adding to Gas costs as well as Electricity, due to the use of Gas for generation.
The last week saw Gas provide 25% of generation, Wind 18% and 17% via the Interconnectors.
We would encourage customers with contracts that end in the next few months to discuss your renewals with us, and we will look to provide further advice and support as required.
If you enjoyed reading this blog, why not try one of our others:
