Natural gas prices in the UK and across Europe hit record highs in several contracts on Tuesday afternoon as the market weathered a “perfect storm” of cold weather, supply concerns and rising demand.
The November gas price in the Dutch TTF hub, a European benchmark, traded at a record €120.80 per MWh on Tuesday afternoon – an increase of more than 26 percent from the day before.
In the UK, the price of bulk gas for delivery in November increased by 14 per cent to £2.79 per therm. Meanwhile, instant delivery prices rose 23 percent to £2.50 per therm.
This marked a 32 per cent increase from Monday’s close and surpassed the previous £2.75 per therm high in March 2018, when a large anticyclone, nicknamed the ‘Beast from the East’, recorded a drop in temperatures.
The rise in gas prices has been blamed on a number of factors, including a cold winter that left stocks plummeting, high demand for liquefied natural gas from Asia as countries were reeling from Covid lockdowns and dwindling supplies from Russia. emerged as
Last month nine British gas companies were forced into administration due to price hikes, leaving hundreds of thousands of Britons facing high tariffs. The rise in prices has raised fears that this winter is going to be a livelihood crisis for many families.
OGUK, which represents the offshore oil and gas industry, reported that wholesale gas prices have risen by 250 percent since January – compared with a 70 percent increase from August alone.
Trade Minister Quasi Quarteng has faced criticism for prioritizing the fate of large energy suppliers. Speaking to Sky News last month, Mr Quarteng said the government was considering “a lot of options” to protect suppliers, including state-backed loans, but stressed that not all firms would benefit from the emergency measures.
When a supplier fails, the energy regulator Offgame moves customers to another retailer to make sure supplies continue and they don’t run out of money. A new supplier is then responsible for taking over any credit balances the customer may have from their previous account.
Although the government imposes a price cap to prevent suppliers from overcharging customers, it is expected that the existing cap will be removed by ministers after the next review – which could result in higher bills for households .
Vis Raghavan, JPMorgan Chase & Co’s top executive in Europe, told Bloomberg on Monday that the energy market is facing a “perfect storm” and there is “no certainty on when oil and gas prices will recover”.
Other industry leaders have claimed that the turmoil in the global energy market will eventually end. “It may take some time, but the market will stabilize at sensible levels,” de la Rey Venter, executive vice president of LNG West, said in a virtual conference call on Tuesday.
Additional reporting by Reuters
Credit: www.independent.co.uk /