UK Natural Gas Prices Hit New High, Trigger “Marketwide Crisis”
Update (1120ET): The latest jump in U.K. natural gas prices has been called a “national crisis” by multiple energy firms and industry groups in the country. They’re requesting the government protect customers and suppliers as critical Russian gas flows into Europe plunge, nuclear outages in France, and cold weather send gas prices to stratospheric levels.
On Tuesday, U.K. wholesale natural gas prices hit a new record high of 470p per therm (intraday). Prices have since eased to 451p per therm.
FT spoke with London-listed Good Energy, EDF Energy, and the trade body Energy U.K. about the alarming situation in the country as the winter in the Northern Hemisphere begins.
“This is a national crisis. Wholesale gas and power prices have increased to unprecedented levels over the last three weeks, creating an extremely difficult operating environment for every business in the industry,” said Nigel Pocklington, CEO of Good Energy, a small renewable energy supplier.
EDF Energy, the fourth-largest supplier in Britain, said high natgas prices are sending power prices skyrocketing, and it’s “critical” for the government to “act now to support energy customers.”
Emma Pinchbeck, chief executive of Energy U.K., said Britain faces “a marketwide crisis.”
“Other Treasuries in Europe have already responded to the crisis, but in the U.K., the energy sector is still asking if the chancellor knows that energy bills going up by over 50 percent in the new year is a problem for ordinary people, businesses, and the economy,” Pinchbeck added.
U.K. lawmakers are in panic mode to protect households by possibly capping power bills. The same is true for other politicians across Europe.
Where there is a crisis, there is always a huge opportunity. We explained yesterday, in a note titled “Commodity Traders Find Huge Arbitrage Opportunity As LNG Ships Head For Europe,” that extraordinary high European premium on gas has made it an arb trade of a lifetime.
…click on the above link to read the rest of the article…
