Europe facing late winter gas crisis

All three have around 31% of capacity and with further cold weather draining stocks. Is there a chance that we will run out?

Market Update

A marked change has taken place in global energy markets with the three key hubs – Europe, the US and Asia all experiencing colder than average temperatures.

Most notably the recent Arctic weather over the United States, not only caused a spike in domestic gas demand, but also caused a 20% drop in LNG production. This is particularly significant given the US is Europe’s largest supplier of LNG.

Increased European gas demand is causing a more rapid depletion of reserves European reserves may fall below 20% if temperatures remain unfavourable. It doesn’t appear that supplies will be exhausted.

We also face increasing risk for winter 2027, as it will take a lot more to re-fill European gas reserves this summer than in previous summers.

In geo-political terms, a potential US/Iranian conflict is the biggest risk factor. Iran could close the Strait of Hormuz, a narrow channel through which 25% of the world’s oil and gas flows, massively impacting supplies.

Understandably, these factors have pushed commodity costs higher. Gas has risen more quickly and has returned to a closely aligned position with electricity.

While the first few days of February has seen prices fall back, neither President Trump or Iran’s leadership can be relied on to steer away from conflict. With US naval resources moving towards Iran, the scope for military action increases.

While the long-term cost of gas looks set to fall due to increasing supplies. In the short and medium term, they could rise due to:-

• Weather risks
• Geo-political uncertainty
• Continuing demand over the summer to restock European reserves

Business Energy Costs

While commodity costs have increased, contract rates have shown mixed movements. They look set to remain volatile over the coming months.

Therefore, customers may wonder when is best to renew their existing contracts. In such a volatile market, don’t leave it late and be forced to agree in a price spike.

Supplier Challenges

Suppliers continue to present a range of issues for customers. Changes of tenancy’s (CoT) are often delayed by suppliers insisting on business rates documentation.

Disregarding the fact that new businesses face waits of up to 14 weeks to receive correspondence. Adding needless delay and expense to what should be a straightforward process.

Operators attempting to action a CoT, can experience issues with suppliers potentially seeking to lure them into contract. Recently, one publican contacted Ruby Energy to notify them of the change of tenancy.

They were told that Ruby had to consult them on prices, and following telling them the prices, the agent told the customer “they had to say yes” - yes, they understood the offer, or, yes, they agreed the contract. The operator did the only sensible thing and hung up!

Pozitive Energy is, also, worthy of mention. They are refusing to release customers to new suppliers, stating that their new supplier won’t take them, due to their T&Cs.

The stated conditions are not part of that suppliers terms and are a fiction spun by Pozitive.

Despite Nationwide Energy repeatedly winning complaints raised to the Energy Ombudsman on customers behalf. Pozitive maintain the same discredited practice. A blatant example of profiteering through maximising customer costs.

With so many utility related challenges facing pubs, it can be difficult to know what course of action is best.

Nationwide Energy’s experienced team works directly with suppliers to bypass the bureaucracy and achieve faster, fairer outcomes. Our clients benefit from a dedicated account manager providing regular updates and expert contract support.

Contact Nationwide Energy today

Tel: 02476 328995

Email: info@nationwide-energy.co.uk

Website: https://nationwide-energy.co.uk/free-guides-to-help-your-business/