Business

Supply issues force up gas prices as Vayu issues winter warning

Wholesale gas prices jumped another 8 per cent last month
Gary McDonald Business Editor

WARNINGS of a difficult winter heating people's homes in Northern Ireland have been further underlined after an industry report from Vayu Energy revealed that wholesale gas prices jumped another 8 per cent last month as maintenance and outages cause supply issues.

Vayu has already predicted "considerable volatility" for this winter, and its latest industry barometer follows that of August, which revealed that gas prices were a whopping 39 per cent higher than a year ago.

The utility firm's latest market review and forecast for the north's wholesale gas, electricity and wind energy says that the increasing prices have been tempered by the recent pick up in sterling against the euro as strong economic data in the UK presents a more positive foreign exchange picture.

The average day ahead price for gas, the contract for gas delivery tomorrow, is 46.26 pence per therm for September, which compares with an average price of 28.49p/th a year ago.

Vayu senior energy analyst Keith Donnelly said: “As expected, there is considerable energy price volatility for gas customers in Northern Ireland.

"Norwegian supply volatility is framing the bullish atmosphere that clung to the prompt market over the course of September.

“Supplies in Norway fell due to unplanned and planned outages, causing prices to rise slightly from August's close.

"Production from the Corrib gas field was also halted after the odourisation process failed causing safety concerns. This led to a slight increase in demand for the UK as Corrib gas on the island of Ireland was replaced by UK sourced gas.”

He added: “With supply diminished, prices continued to rise reaching a peak of 48.55p/th. Risk and volatility are the buzz words as the UK is on the cusp of its first winter without its largest gas storage facility.”

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