Headlines:
- The lack of progress in the peace talks is adding pressure to prices.
- Global competition for LNG shipments.
- The low EU Gas Storage levels are a concern as we approach winter’s high demand.
Energy Overview
On Monday the 17th of August, Gas Year Ahead Wholesale costs were higher than last week and have seen further gains this morning. Oil is also up, at $91.
Prices dipped for a short period, with a statement suggesting progress in the peace talks, which quickly proved to be inaccurate. The US appears to be resigned to using longer term tactics such as blockades and sanctions against Iran. This means that energy markets now reflect a likely prolonged shortage of LNG, with price gains being focused on winter 2026/2027.
The EU’s Gas Storage is just 61% full, against a target of 80% by November. There is the potential for a significant exaggerated market reaction, should there be forecasts for below average temperatures or other global events, which result in a higher use of Gas or a cut in production.
High temperatures across Europe continue to impact on some Electricity generation, that require water for cooling. This increases the demand for Gas generation.
The last week saw Gas provide 31% of generation, Wind 12% and 19% 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.
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