Wholesale gas prices down 22 per cent
WHOLESALE gas prices in July have been 22 per cent lower on average than the same month last year.
The latest Wholesale Energy Market Report by Vayu Energy also revealed a 13 per cent decrease in the cost of wholesale electricity over the same period.
The fall in gas prices is slowing however, down just 3 per cent compared to June.
The decline was limited by maintenance in the North Sea, along with record exports from the UK to the continent due to the shut-down of the UK’s largest storage facility, and increased demand for gas for power generation.
The average day-ahead price for gas – the contract for gas delivery for tomorrow – is 33.85p/th (pence per therm) so far in July, compared to 34.27p/th in June.
Commenting on the outlook for the remainder of the year Gillian Lawler, Senior energy analyst at Vayu said: “The market reaction to Brexit continued to be felt in early July on gas prices for delivery to year end as the pound continued its poor performance against the euro.
"Traders were anxious to mitigate currency risk amid the uncertainty surrounding the UK’s vote to leave the EU. When the euro strengthens against sterling it makes trading in sterling markets more attractive for those with euro to spend, thereby increasing activity in markets like the NBP.
“July has been plagued with North Sea field outages, planned and unplanned, and while prices have dropped this month, we have not seen the decline in prices that we might otherwise have expected the further we get into summer, and prices are yet to soften significantly in response to the increased availability of LNG (liquefied natural gas) in the UK."