Headlines:
- The expanding conflict in the Middle East is impacting on energy prices.
- No realistic sign that a peace deal will be found in the short term.
- EU Gas Storage levels are a concern as we approach winter.
On Monday the 14th of September, Gas and Electricity Year Ahead Wholesale costs were higher than last week. There are small reductions this morning. Oil is higher at $108 from $99.
There was renewed hope that a meeting on the 14th of September between Middle Eastern countries, could make progress in opening the Strait of Hormuz. However, it was cancelled due to an attack on a Saudi Arabian Oil pipeline, increasing threats to their shipping by the Iranian backed Houthi in the Red Sea, and a disagreement regarding the introduction of tariffs.
President Trump has acknowledged that the war is unlikely to end before the US elections in November. This is in stark contrast to initial estimates of a quick conflict and highlights the concern for global energy supplies. This is being reflected in the significant price increases.
EU Gas Storage is just 68% full compared to 93% in 2024. Ukraine are targeting Russian Gas supplies, despite their LNG still being imported by the EU, until the ban in January 2027.
The last week saw Gas provide 25% of generation, Wind 28% and 13% 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.
