Daily Updates
The energy prices have flipped and recent trades have shown a small increase yesterday (6th April) against Tuesday’ close. One of the Norwegian fields has reported a problem, which will possibly lead to drop of incoming gas volumes for today, however Russian gas imports into Europe remain healthy but there is some concern around how Europe will compensate its energy demand given the new additional sanctions against Russian coal.
Gas
Wholesale gas prices for May 22 fell slightly on Tuesday (5th April), closing at 242.24 pence per therm, a 0.7% drop against Monday’s close. Prices had initially shot up following the news that the EU were looking at additional sanctions against Russia as punishment for the reported stories coming out of Bucha. Prices started to soften in the afternoon due to increases in upcoming wind forecasts. It also became clear that the additional sanctions would only apply to Russian coal, while sanctions against Russian gas imports are yet to apply, but they are a little closer as Germany and Italy, who had both previously been anti gas sanctions are now warming to the idea..
Electricity
Wholesale power prices for May 22 also fell slightly on Tuesday, closing at £211.48 per MWh (see below), which was 1.1% down against Monday’s close.
In other energy related news:
- The Russian Ministry of Finance have announced figures to suggest that the sanctions against Russia are starting to bite. They reported that for March, Russia had received 496 billion roubles, approximately £4.5 billion. They were however expecting to receive 790 billion roubles, approximately £7 billion.
- A reversal to the current moratorium on fracking in the UK is not expected to appear in the energy security paper expected due to be released by the UK government today (7th April), but the Business Secretary Kwasi Kwarteng has asked the British Geological Survey to carry out a scientific review into fracking and so a potential change to the current position could be announced once the report is delivered in June.
- One area that is very much expected to be receiving government support in tomorrow’s report is nuclear energy, especially as Kwasi Kwarteng and Boris Johnson are planning to visit a nuclear facility to support the release of the report. Mr Kwarteng has announced that the UK has 25 nuclear current and former facilities and developing some of these sites or re-opening former sites will be better than creating brand new facilities where opposition from local residents is likely to be fierce.
- The German regulator, the new owner of the Gazprom entity in Germany and by de facto, the UK Gazprom entity as well, has asked all existing Gazprom businesses to change their name and logo to distance themselves from the former Russian owner. This is likely to happen in a matter of days rather than months. Russian Gazprom has recalled it’s managers from Germany to Moscow and has also asked it’s former subsidiaries to stop trading under the name Gazprom.
- Lithuania is the first European country to reduce its Russian gas supplies to zero by putting in place short term LNG bookings from alternative sources. That’s not bad given that in 2014, they were importing 100% of their gas from Russia.
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