Never Have So Many Factors Influenced UK Gas Prices

Back in the days when British North Sea natural gas reserves were at full throttle Britain use to be self sufficient for natural gas. In those days only a couple of factors had major influence in UK gas prices, they were weather and demand, the golden days as many energy brokers referred it. Nowadays the UK gas and energy market has grown more complex with several factors influencing prices on a daily basis.

In 1998 the first gas pipeline between UK and continental Europe was opened which automatically hooked British gas prices to European oil indexed prices. That was when British prices started to be influenced by marginal factors.

This is how it works. When crude oil prices rose, so did natural gas prices for continental Europe and consequently the UK, because of pipeline connections to Europe. Since UK gas prices aren’t completely hooked up to European oil indexed gas prices, gas in the UK becomes cheaper than in continental Europe and European gas traders end up buying gas from the UK. That is when the demand in increased and UK gas suppliers put their prices up to stop the flow to continental Europe and to contain the price surge in the UK gas market.

One factor that recently started to play an important role in the British gas and energy market was LNG imports. Liquefied Natural Gas imports brought a global component to business and commercial gas prices. Predictions are that in a few years time the UK will be importing as much as 50% of its total gas supply needs from LNG which will make UK gas prices compete with American and Asian markets.

The biggest issue with LNG imports is where to store it. Britain is lacking LNG import terminals but the issue is being addressed with two new large terminals under construction in Wales and the expansion of the Isle of Grain should increase UK’s LNG storage capacity considerably.

Commercial and business gas prices continue to be influenced by weather and demand but as afore mentioned not as much as it use to. Proof to that is what happened the past winter, when temperatures were way below seasonal average pushing gas for heating consumption to extremely high levels and instead of going up wholesale gas prices dropped.

As if energy brokers didn’t have enough to worry about, two new factors are concerning energy brokers across the land. It first started with the turmoil in Egypt that extended to Libya which made crude oil prices surge over the $120 US Dollar mark, causing a rally in the UK gas market. As a consequence UK gas prices climbed to its highest levels in more than 21 months.

The second factor that is taking away the sleep of UK energy brokers is the earthquake and tsunami that devastated part of the eastern coast of Japan. You may ask why? The answer is simple, Japan is the biggest LNG importer and a reduction in its nuclear energy generation increases the likelihood of LNG tankers being diverted from the UK to Japan, as the second biggest Japanese energy generation resource is gas power plants.

As you can see the UK Energy and Gas Market are more complex than what many people think. Now imagine you having to watch all those factors in order to find the cheapest business gas and business energy prices for you company. You wouldn’t have time to focus on what really matters for your business. That is why when it comes down to finding the best deals in gas or energy it’s best to leave it to the professionals: Energy Brokers.

If you would like more information on our range of energy services or would simply like to find out how this could benefit your business, simply call our energy team today on 0870 710 7560 or request a call back at time to suit.

Follow us on Twitter | Become a Fan on Facebook

Or you might want to subscribe for further updates direct from our site.

Name:

Email:

We respect your email privacy

Gas Prices Rise with Power Shortages in Japan

Yes you read it right, power shortages in Japan made UK gas prices rise four percent yesterday. In total 10 nuclear plants are out of action in Japan which increases the likelihood of LNG tankers being diverted away from the UK to Japan.  “The severity of the situation is heightened by the possibility that the injection of seawater for emergency cooling of several of the reactors affected by the earthquake could require the scrapping of those reactors, so resulting in a permanent loss of some of the nuclear capacity already down,” Deutsche Bank analysts said in a note on Tuesday.

Gas for delivery next winter surged to its highest levels since late 2008 on the prospect of less LNG being available to cover potential demand spikes during cold winter weather. Contracts were closed at 74.25 pence per therm at market opening on Tuesday before falling to 73.20 late in the morning.

Summer contracts also closed a record high levels trading at 65 pence at the start of the session and then falling to 64.5 pence per therm. Spot gas prices shed one penny to 63 pence, while day ahead contracts firmed at 63.10 pence per therm.

“Prices are still strong. They are up from yesterday but there’s a bit of selling coming in now. Prices are not coming off much though,” said one Business Gas broker.

The same Business Gas trader stated:

“I can’t see it coming down a lot while we have nuclear issues in Japan. It’s very unclear on what is happening with Japanese LNG demand so the market is nervous,”

As complex as it is now the UK gas market has to deal with consequences that are happening on the other side of the globe. Who would expect that the devastating natural disaster in Japan could influence UK gas prices?

What baffles me the most is the fact Japans nuclear plants insurance doesn’t cover tsunamis and earth quake damages. According to experts all together this catastrophe could cost Japan a total of £115 BILLION.

Contact Us

If you would like more information on our range of energy services or would simply like to find out how this could benefit your business, simply call our energy team today on 0870 710 7560 or request a call back at time to suit.

Follow us on Twitter | Become a Fan on Facebook

Or you might want to subscribe for further updates direct from our site.

Name:

Email:

We respect your email privacy

Middle East Unrests Continue to Influence Gas Prices

UK gas prices climbed to its highest levels in more than 21 months supported by conflicts in Middle East which are pushing Brent crude oil prices close to the $120 a barrel.  On Monday Brent crude oil prices firmed at $117.40 a barrel, causing a rally in the UK gas market. Winter gas contract prices climbed to 68.50 pence per therm on Monday morning, the highest since May 2009.

Concerns about the turmoil in Libya, tensions in Saudi Arabia and rumours of the wave of anti-government protests spreading across the Middle East and North Africa, spooked the market early this week.

So far Libya has cut off only 2 percent of Europe’s gas supply but as unrests spread to countries like Oman, Yemen and Algeria, the uncertainties about future oil and gas production in these countries increase.

“The potential disruptions of gas production in countries currently under social unrest are significant,” – said an energy broker.

Higher oil costs push up some mainland European gas contracts and affect prices in the U.K. because of pipeline connections to Europe. Stronger oil also means that European gas suppliers may buy gas in the UK over the coming months as their oil hooked up prices rise in price.

Gas for summer 2011 contracts rose 1.75 pence to 59 pence and April’s climbed to 58.90 pence. Meanwhile spot gas prices were traded at 59.75 pence on Monday, up 2 pence from Friday. On Tuesday prices continued to surge hitting 60 pence per therm. At the time of writing.

Stronger gas prices means higher energy prices, baseload power for Tuesday was traded at 51 pounds per megawatt-hour. The biggest rise was seen on Winter 2011/12 contracts with increases of 2 pounds trading at 56.90 pounds per megawatt-hour. At the time of writing.

Updated

U.K. natural-gas and power contracts declined after two days of gains as crude fell and milder weather was forecast.

Gas for summer, the six months from April, lost as much as 1.55 pence, or 2.6 percent, to 58 pence a therm, according to broker prices compiled by Bloomberg. It was at 58.4 pence as of 9:25 a.m. in London. The winter contract dropped as much as 1.05 pence to 67.75 pence.

Gas for same-day delivery fell 0.9 pence to 58.9 pence.

Power for next month dropped for the first time in nine days, losing 90 pence, or 1.8 percent, to 50.10 pounds a megawatt-hour.

source: Bloomberg Businessweek

Contact Us

If you would like more information on our range of energy services or would simply like to find out how this could benefit your business, simply call our energy team today on 0870 710 7560 or request a call back at time to suit.

Follow us on Twitter | Become a Fan on Facebook

Or you might want to subscribe for further updates direct from our site.

Name:

Email:

We respect your email privacy

The Importance of Hiring an Energy Broker

Every week we bring you the latest UK energy and gas prices. These prices vary on a daily basis influenced by a series of factors that we talked about in our article: “Understanding the Fluctuation of UK Gas Prices“. As professional gas and energy brokers it is our job to stay on top of the news in order to find the best deals for our clients.

Now imagine you having to do all this for your business or allocating employees that have no experience in the UK energy market, to find your organisation the best business energy and business gas prices. First you would be wasting time that could be used on other projects that matter to your business, and second these professionals wouldn’t be able to find you the best deals because they don’t have the market knowledge to do so.

That is why it is extremely important to hire independent energy brokers if you want to not only find the best energy and gas contract, but also improve the energy efficiency of your business.

Energy brokers have the market intelligence to understand and predict market conditions, therefore, finding the best contracts that will reduce costs and improve efficiency. Leaving you with the calm and tranquillity to focus on what really matters to your business.

There is nothing like a fresh pair of eyes to uncover areas for significant improvement that may not have been previously identified. Energy consultants have the advantage of working with many different organisations in various niches which make them versatile professionals capable of finding energy management solutions for just about any business.

Another factor that highlights the importance of hiring independent energy brokers is supplier relation. Here at Catalyst for instance we work on behalf of thousands of UK companies which give us a bigger bargain power when purchasing energy or gas from suppliers.

Before you ask if we were not going to bring you the latest gas and energy prices, here they are:

Gas Prices

Gas for Tuesday delivery rose 0.20 pence to 56.00 pence per therm at 1005 GMT, and day-ahead contracts gained 0.25 pence to 55.95 pence. Gas for April rose to 54.90 pence and gas for delivery next summer went up 0.05 pence and traded at 54.80 while winter gas surprisingly fell 0.15 to 64.35 pence.

Energy Prices

Day-ahead power gained 0.25 pounds on the previous session to 48.45 pounds per megawatt-hour (MWh).

Contact Us

If you would like more information on our range of energy services or would simply like to find out how this could benefit your business, simply call our energy team today on 0870 710 7560 or request a call back at time to suit.

Follow us on Twitter | Become a Fan on Facebook

Or you might want to subscribe for further updates direct from our site.

Name:

Email:

We respect your email privacy

Gas Prices Rise as Middle East Unrest Continues

What started in Egypt seems to be spreading all over the Middle East. Popular revolt and political uncertainty is making investors plan for the unpredictable, as crude oil prices continues to rise, which in turn is contributing to higher gas and energy prices.

When the protests started in Egypt crude oil prices were below the $100 mark, more precisely at $98 a barrel. Last Monday the Brent crude oil barrel was traded at $108.  As UK gas prices are tied up to oil prices, prompt and curve gas prices rose too.

Prompt gas contracts for immediate and day-ahead delivery were both up nearly one penny from Monday’s close at 54.55 pence. While winter 2011 gas contract traded at 63.50 pence per therm, the highest level since October 2009.

On Tuesday morning National Grid data showed that the system was undersupplied which associated with a slightly higher increase in demand was also responsible for higher wholesale gas prices.

Since nearly 50% of UK power production uses gas as a fuel day-ahead energy prices also reported an increase of 0.75 pounds and were traded at 47.25 pounds per megawatt-hour. A drop in wind power generation also added to higher energy prices.

If you would like more information on our range of energy services or would simply like to find out how this could benefit your business, simply call our energy team today on 0870 710 7560 or request a call back at time to suit.

Follow us on Twitter | Become a Fan on Facebook

Or you might want to subscribe for further updates direct from our site.

Name:

Email:

We respect your email privacy

Bill Gates Investing Millions to Stop Global Warming

The man who revolutionised personal computing now wants to revolutionise the way we generate energy. After stepping down as the CEO of Microsoft, Bill Gates has been investing millions of dollars to fight global warming; his ultimate goal is to find an energy source completely free of CO2 emissions.

Will Bill Gates ever find a way to generate carbon-free energy? Have your say here.

For the past few years Gates has dedicated most of his time and money to projects that range from the development of high voltage batteries to machines capable of extracting CO2 from the air.

As one of the most successful business men in history his words carry enormous credibility which gives more visibility to projects that might not leave the drawing board. Above all Bill Gates is seen as a visionary and if he believes such projects could change our lives, a lot of people will sit and hear what he has to say.

According to Mr. Gates the world needs an “energy miracle”, an energy source that is reliable, cheap and carbon free. He says we shouldn’t put all our eggs in one basket and purse every available path to achieve this really big breakthrough.

Around the globe there are many countries generating energy from renewable energy resources that look very promising but not big enough to cause the impact needed to make a change. Tidal energy, geothermal and even wind are all good and clean energy generating resources but we need more than that.

The father of Windows is working on a new nuclear approach called travelling-wave reactor, which uses waste uranium for fuel. That dream is far from becoming a reality but if it does we could have cheaper energy with no CO2 emissions.

To sum things up Bill Gates points out two immediate solutions the American and other Governments around the globe should take note to make the transition towards a carbon free society quicker. Increase investment in research and development of new energy generating technology and a well structured energy plan that considers each option based on the likelihood of success.

If you would like more information on our range of energy services or would simply like to find out how this could benefit your business, simply call our energy team today on 0870 710 7560 or request a call back at time to suit.

Follow us on Twitter | Become a Fan on Facebook

Or you might want to subscribe for further updates direct from our site.

Name:

Email:

We respect your email privacy

Commercial Gas Prices Rise Again

UK spot gas prices rise as Norway’s biggest gas platform Troll shuts temporarily overnight.  Just as UK gas market analysts and gas brokers were talking about how reliable and important Norwegian gas supplies has been to the British gas market this winter. Two weeks of unexpected outages and shut downs due to power cuts in Norwegian gas platforms and gas processing plants made the rollercoaster of UK gas prices move again.

Wholesale spot gas prices hit a season high of 55 pence per therm on Tuesday, up 2.20 pence, after gas flows from Langeled pipeline plunged from 65 mcm to scary 13 mcm and supplies into Scotland dropped from 54 mcm to only 10 mcm.

A brief overnight shutdown of Norway’s biggest gas platform Troll A and then a reduction of 40 percent in exports due to an unrelated power problem from Norway’s second largest export plant were responsible for the plunge of gas flows into Britain.

In the early hours of Tuesday, talks were that the issues in Norway were resolved and Langeled was ramping up again and gas flows would go back to normal over the course of the day.

Within a day gas prices had eased to 54.70 pence by 1120 GMT, while gas prices for Wednesday eased from highs of 54.25 pence to 53.25 pence after Troll operator Statoil said the shutdown had been due to a “false alarm,” which should mean more gas coming to Britain yesterday afternoon.

Despite below average demand for this time of the year, the UK gas market was apprehensive as flows into eastern England and Scotland remained at low levels, late Tuesday morning.

The good news was that inputs from LNG terminals and Britain’s biggest gas storage site Rough compensated for some of the lost supply from Norway.

If you would like more information on our range of Commercial Gas services or how we compare gas prices, or would simply like to find out how this could benefit your business, simply call our energy team today on 0870 710 7560 or request a call back at time to suit.

Follow us on Twitter | Become a Fan on Facebook

Or you might want to subscribe for further updates direct from our site.

Name:

Email:

We respect your email privacy