The surreal, but also real, problem of Britain's gas glut

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UK wholesale gas prices are at the lowest level for nearly 18 months - however consumers will get little or no relief. EdConwaySky explains what's happening in the market, and what it means for energy prices. Read more: 📺 Sky 501 and YouTube

What's going on here? Why are UK prices so low, while they remain so high on the other side of the channel?

And, as you also know, everyone in Europe is doing everything they can to reduce their reliance on Russian gas.Now, Europe could potentially get more gas from North Africa and some too from Azerbaijan, which is constructing new pipelines into the continent. It can't get much more gas from the North Sea, either from Norway or the UK - in large part because they are already pumping as much as they physically can right now.

In recent months, there has been an enormous amount of LNG redirected to Europe , but the ships are running out of places to put their gas. This brings us back to the UK, where plenty of LNG has been flowing off tankers, through regasification facilities and into the gas grid in recent weeks. The two gas pipelines which connect the UK with the rest of Europe are running at full capacity right now .

The upshot is the UK, which typically has to rely on imports of electricity from the continent, has temporarily become a big exporter of electricity, sending power at a rate of more than four gigawatts across to mainland Europe in recent days. Anyway, at this stage you're perhaps wondering: how soon until this is reflected in my bill? Is the cost of living crisis now over?

 

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EdConwaySky Why is there a difference between the short and long term markets? Is it down to speculation? Would it be cheaper if RishiSunak stopped speculation in this market? Afterall energy is a matter of strategic national security - the first duty of BorisJohnson

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