Main Energy Report December 22
- Gas and Electricity Wholesale costs move higher with colder temperatures.
- EU Gas Storage levels are a high 91% full.
- Still potential price volatility should there be further supply issues.
As of the 7th of December, Gas and Electricity Year Ahead Wholesale costs were higher, when compared to last month’s report.
Oil is lower at $79 per barrel, from $94, despite OPEC+ taking measures to keep the price inflated. The $60 price cap
imposed on Russian Oil exports and a slowing economic growth forecast, are contributing factors.
Large numbers of LNG shipments continue to arrive in Europe, which has helped the EU maintain a high level of Gas Storage. There have also been efforts to reduce consumption and source supplies from elsewhere, due to the closureon Nord Stream 1 and 2 from Russia. The recent upturn in Gas costs is largely the result of colder temperatures and an increase in demand. The Met Office forecast suggests very cold spells for periods in December, with wintry showers and overnight frosts, but the possibility of a return to seasonal norm conditions towards the end of the month.
Electricity generation costs have moved higher due to the use of expensive Gas and the reduced contribution of Wind. The UK like other nations is exploring a number of solutions to avoid power shortages through the winter, including standby Coal generation, specifically to meet peak demand. Imports from France will be less likely due to large numbers of their Nuclear reactors being offline.
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