In the past whenever Gas prices rose, we were lucky in that it was only ‘short-lived’ and the market tended to drop back to ‘normal’. Unfortunately, this week gas prices are showing no let up in the upward movement.
In fact, gas prices showed significant gains as oil prices continue to remain firm priced above $75bbl for the majority of last week.
Following Donald Trump’s decision to pull the US out of the Iranian Nuclear Deal, with the threat of sanctions on one of the largest exporters of Oil, there seems to be a bullish trend on the market.
Prices of Oil continue to rise, despite US data showing that Oil Rigs are now at the highest level in history.
As well as this, on Thursday last week, the Bank of England voted against raising Interest Rate, opting to keep the rate at 0.5% rather than to increase, which was largely against the market expectation. This led to a sharp fall in GBP to Euro making the UK Gas market relatively cheaper to those backed by Euro’s. With the extra buying demand, the UK prices increased.
May-18 has a large number of gas field and processing facility outages which will inhibit the flow of gas to storage, helping to lift Winter-18 prices.
Over the course of the week, the UK has basked in warmer and generally calmer weather, leading to a reduced gas demand. Total demand has been at least 30mcm below the seasonal norm on some days.
For more market information and news, sign up for our newsletter here. If your gas renewal is due this year and you’re looking for some advice on when to secure your gas prices, get in touch today for a free review.