UK gas and power prices rocket as Austrian gas explosion follows North Sea pipeline shutdown
Wednesday 13th December 2017
UK gas and power prices across the remainder of this winter rocketed Tuesday morning, as an explosion at central Europe’s main gas hub ─ Baumgarten in Austria ─ further fuelled gas supply concerns that had already been whipped up by the closure of the Forties Pipeline System in the North Sea for emergency repair work on Monday.
Day-ahead UK gas rose to over 85 p/th, Within-day gas to 92.5 p/th, and January, February and Q1 gas to 70 p/th, the highest levels for all of these periods since 2013. (Day-ahead has gained as much as 50% in value since Friday, while Month-ahead has surged by 22%.)
UK power prices were propelled higher too, with January up £9/MWh at one stage, as it broke above £65/MWh, and Q1’18 nearly reaching £60/MWh (up by as much as 18% and 10% respectively since Friday.)
Prices did swing lower but were climbing again at the time of writing as the market remained volatile.
The market effect was amplified by the current cold snap across Europe pushing up general demand levels, while export flows from Norway also dipped today due to maintenance work at the giant Troll field.
Prices for periods beyond the current winter firmed too, but to a lesser degree ─ Winter ’18 gas was trading at 53 p/th and Winter ’18 power at £50/MWh at midday on Tuesday (up 4% and 3% respectively over the last couple of days).
Around one-tenth of European gas is estimated to flow through Baumgarten, while around one-tenth of UK winter gas supplies come from fields attached to the Forties Pipeline System (FPS), according to analysts. A “controlled” shutdown of the FPS was announced after the discovery of a crack line, which will take several weeks to repair.