Daily Updates
A reduction in the amount of Russian gas coming through the Ukrainian pipeline to Europe was observed on 12th April, meaning 21% down on the previous day, and concern over whether Russia had recently carried out a chemical attack in Ukraine, added to the bullish opening to the market. Gas prices have stayed higher within day, but power prices have gradually reduced and the last trades have been at very similar levels to the prices we saw for May 22.
Gas
Wholesale gas prices for May 22 fell on Monday, closing at 213.01 pence per therm, This was a 6.8% drop against Friday’s (8th April) closing price.
Electricity
Wholesale power prices for May 22 fell only slightly on Monday, 11th April closing at £192.78 per MWh, which was a 0.2% fall against Friday’s close.
In other energy related news:
- The government has now confirmed how the £200 loan (or grant as they are calling it) will be applied to home energy bills following the announcement by the Chancellor in his last budget to help domestic customers in light of the current increase in wholesale energy prices. The plan is for £200 to be used to reduce the cost of the October 22 electricity bill for all domestic account holders. A repayment of £40 per annum will then be applied to the same account holder over the next 5 years. The £200 grant / loan will be applied to all customers in England, Scotland and Wales. The Northern Island has been issued with it’s own sources and will soon announce their own scheme. The government recognises the approach may cause an issue with Houses of Multiple Occupation (HMOs), given that the £200 will be paid to the account holder, which for most HMOs will be the landlord, and so they are still working on how to get around this.
- OPEC has announced that the current and future planned sanctions against Russian oil could have far reaching implications and could create one of the worst oil supply shocks ever seen. It went on to say that it would be impossible to replace the estimated reducing volumes and that it would not be pumping more oil to mitigate against the volume shortfall. With oil prices having recently reached 14-year highs, this suggests that current fuel prices, which are already very high, may continue to increase in the coming months.
- A new energy link between the UK and Germany is being proposed by NeuConnect. If successful, the 725 km interconnector will be the first energy link between the two countries and it would cost an estimated £1.5 billion.
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