Headlines:
- Prices continue to increase due to the US / Iran conflict.
- The global competition for LNG shipments is pushing up prices.
- Low EU Gas Storage levels are a concern as we approach winter.
Energy Snapshot
On Monday the 7th of September, Gas and Electricity Year Ahead Wholesale costs were higher than last week, with further increases this morning. Oil is higher at $99.
The pressure on global prices continues with little sign of any progress in resolving the conflict between the US and Iran. There has been an increased focus on sanctions and blockades which are potentially a longer-term solution, but military strikes have also resumed following a pause.
The Strait of Hormuz remains effectively closed, adding pressure to global supplies of LNG. The competition for shipments which are not contracted, is driving up prices. This makes it more challenging for the EU to add to Gas Storage levels, which are a low 67% full compared to 79% last year. Although it is very unlikely that EU nations will run out of Gas through the winter, we could find that the continuation of the shortages, and forecasts for prolonged spells of below average temperatures, could have a big upward impact on costs.
The last week saw Gas provide 17% of generation, Wind 35% and 10% 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.
