UK gas storage levels are still struggling to recover from earlier in the year and even dropped towards the end of June, a period when we would usually see them increase. This was largely due to low gas flows from Norway (caused by maintenance and unplanned outages) and overall slow storage injections throughout Europe, with facilities sitting at 46% capacity – extremely low for late June.
The gas prices for winter 2021 have increased by around 70% since January, triggered by low storage levels throughout Europe, maintenance and supply issues, exacerbated by Russia’s refusal to increase gas supplies over the last quarter.
Additionally, reduced scheduling of LNG imports to Europe is driving prices higher, emphasised by Asian gas markets trading at roughly a 10% premium compared to European gas stores, triggering deliveries to be directed elsewhere.
UK Electricity prices were revived at the beginning of June, supported by shortages in wind power and above average temperatures across Europe.
As the month progressed, both long and short-term electricity prices continued to follow the gas and carbon upward curve, spiking to a record-breaking high.
Short-term prices were further backed by forecasts for a heatwave predicted to hit Europe this summer.
With travel picking up in Europe and North America in mid-June, Oil rose to its highest since late 2018 on June 23rd, sitting at 76 USD per barrel. This was triggered by an industry report on US Crude inventories which solidified predictions of a tightening market.
However, as Covid cases began to rise again throughout June, with the increased spread of the new Delta variant, oil prices began to tail off towards the end of the month amid fears of restricted global travel and slower fuel demand.
Due to these Coronavirus-related fears, Brent Oil prices closed at 73.38 USD at the end of June, compared with 75.23 USD in May.
The UK Government’s efforts to eradicate coal power have recently been brought forward, as Prime Minister Boris Johnson promised to make coal power a thing of the past by October 2024, one year earlier than originally planned
In preparation for the COP26 summit in November, the UK government is urging all countries to commit to phasing out coal power, with Alok Sharma, the COP26 President-Designate encouraging more nations to join The Powering Past Coal Alliance to set out a plan and dates to end the use of coal.
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