LNG supplies from both Australia and the US have been interrupted. Australian LNG usually goes to Asia, leading to Asian countries competing for gas with Europe, when their demand is increasing to meet electricity generation demands due to summer A/C use. At the same time, production losses in Norwegian gas fields, now Europe’s largest supplier, have further reduced supply.
On the geo-political front, increased Russian attacks on Ukrainian infrastructure means more demand on European electricity. In a related development, on Wednesday Austrian gas supplier OMV announced it was likely to have any payments to Gazprom redirected to other European suppliers as part of an ongoing dispute.
This would mean the end of Russian gas deliveries for Austria and the other countries still getting Russian gas such as Hungary and Italy. Further increasing demand on other sources.
Risk building
All these events have occurred alongside cooler temperatures and lower wind generation, increasing gas demand at a time when multiple events are restricting supply.
While many of these events are short-term in nature, the markets are building in more risk and the future direction of costs remains uncertain.
While the current sample reflects contract prices falling marginally by unit rate and/or standing charge, the market fundamentals suggest that a round of price increases is close.
Strong advice
Customers are strongly advised to consider any current contract offers as prices seem likely to increase.
Nationwide Energy’s field consultants and renewals advisors can provide customer-focused advice, a market review, and updates on available prices.
Any customers struggling to pay current rates or who are at risk of default can contact our Billing Team for support and advice on their options. Please contact us on 02476 328995 or at info@nationwide-energy.co.uk
• Graph produced by Cornwall Insight in conjunction with Drax Energy Solutions 23/05/2024
