More forecasts/information from the Telegraph -
Britain has as little as two days of gas stored up, raising fears of a potential crisis as supplies from the Middle East dry up.
The UK’s gas reserves have shrunk from 18,000 GWh worth last year to 6,700 GWh – enough for just 1.5 days of demand, according to new data published by transmission operator National Gas.
A similar amount is stored in tanks as liquefied natural gas. Europe, by contrast, has built up reserves of several weeks-worth of gas.
The crunch in supplies has resulted in traders charging the UK a premium for gas, exploiting its need to outbid rivals in other countries. It means the UK is now paying the highest wholesale gas prices in Europe.
Meanwhile, Goldman Sachs released a note on Friday evening warning that the size of the Middle East oil supply shock was “17 times larger than the peak April 2022 hit to Russia production”, following the invasion of Ukraine.
“We now think that oil prices would likely exceed $100 next week if no signs of solutions emerge by then,” the bank said.
“We now also think it’s likely that oil prices, especially for refined products, would exceed the 2008 and 2022 peaks, if Strait of Hormuz flows were to remain depressed throughout March.”
Natasha Fielding, head of gas pricing at Argus Media, a leading publisher of commodity data, said: “The price of gas in the UK has increased by more than almost anywhere in Europe. The UK gas hub price is now above the Dutch TTF [the main European gas hub] all the way from now until the end of May. Before this week, the UK was priced below the EU.”
She said this was partly driven by the UK having “little gas storage and so is more exposed to price spikes” adding: “We can’t rely on withdrawing more from storage, so we have to get that gas from abroad.”
Ms Fielding added that traders were also factoring in if it gets cold in Britain, which would mean the UK would have “no choice but to outbid other buyers”.
It comes as the UK effectively lives hand-to-mouth, relying on a constant flow of tankers laden with American liquefied natural gas (LNG), plus piped gas from Norway, to keep the lights on and homes warm.
The UK used to have up to 12-days worth of gas in storage but successive government ministers pulled funding for the system and it collapsed. A raft of short-term storage facilities around the UK were mothballed in the last decade.
National Gas data showed that gas stores were at 18pc of their former capacity on Friday, while LNG stores were just over half full.
A spokesman for the Department for Energy Security and Net Zero said: “We are confident in our security of gas supply. We are working with industry to ensure the gas system is fit for the future, including maintaining security of supply.”