Gas system under supplied

npower have reported in  their daily market report that the gas system in the UK is ‘slightly’ undersupplied and demand is higher than the seasonal norm. It is forecast that the linepack will be 6mcm short.

The UK has ramped up storage withdrawals to combat the higher demand and exports to Belgium via the IUK pipeline have been reduced to 7mcm a day, down from 17mcm a day. It is believed that the combination of these two actions will be enough to combat the slight undersupply and not affect prices.

The overall demand has been revised up to 320mcm after lower than seasonal norm temperatures, causing people to ramp up the heating in their homes and businesses. It is expected that temperatures will return to above the seasonal norm by the end of the week, which will cause demand to lower.

The price of gas over the past 12 months has been on a steep decline, falling from just over 56 p/therm in November 2014 and now sitting at just below 36 p/therm, a 35% fall. Businesses have been taking full advantage of this fall, saving huge amounts of money on their business energy costs.