UK Natural Gas market in doldrums despite Govt Assurance, NBP Nat Gas crossed USD 42/MMBtu
Despite natural gas prices being at record levels in the UK, Government has assured citizens that there is no uncertainty in natural gas reserves and supply security. In a statement, the head of gas security, Department for Business, Energy, and Industrial Strategy (BEIS) has remarked that there is positive feedback from the market as it battles high prices and balances supply-demand dynamics.
UK is observing some remarkable numbers where prices for NBP (National Balancing Point) natural gas prices have jumped over USD 42 per MMBtu on Thursday (16th December 2021). These prices depict an astonishing increase of more than 500% from the price assessments of December 2020 and are also evaluated highest in the whole European region and among key trading hubs.
Curtailed supply from Russian producers has troubled UK Government in keeping their natural gas reserves at optimum levels. The decline in imports from the USA has further tested the UK reserves as the US wrestled a drop in domestic production in the aftermath of hurricane Ida.
Natural Gas reserves continue to plunge downwards, latest estimates from Gas Infrastructure Europe (GIE) measured a drop of close to 20% from the same time a year ago.
UK Government has been taking a strong stand against the current upheaval however market hasn’t been following through complexing the overall situation. The high import dependency of the UK has left the market open to volatility.
As per ChemAnalyst, “Natural gas prices in UK are unlikely to change sentiment as winter season moves ahead and about to hit its peak, keeping energy consumption levels strong and in turn, maximizing demand for natural gas.”
