Wholesale gas prices in the United Kingdom reportedly fell after hitting a record high following Russia’s disclosure that it is boosting supplies made to Europe.
Sources cite that Vladimir Putin, the President of Russia, appeared to calm the market after an escalation in gas prices by 37% in 24 hours to trade at 400 pence per therm on Wednesday, 6th October 2021.
At the beginning of the year, the UK gas was priced at 60 pence per therm. However, the upsurge in prices was led by the globally high demand and shortages in supply.
For the record, the price spike resulted in the Energy Intensive Users Group calling on the UK government to assist in keeping industries and businesses running. The group represents fertilizer, chemical, and steel firms. As quoted by market leaders, the mounting costs had already resulted in the halting of steel production at times of peak demand.
According to Hargreaves Lansdown Senior Investment and Markets Analyst, Susannah Streeter, the alterations in gas prices highlighted the volatility in the market and the apprehension amongst investors regarding low stocks of gas across the European region. Streeter further added that when Putin’s promises help in calming the storm of mounting prices that was slugging financial markets, it is clear that investors are desperate for any good news that comes in.
As stated by a Department for Business, Energy, and Industrial Strategy spokesperson, the government is determined for securing a competitive future for the energy intensive industries in the country. In the past few years, these industries have been provided with extensive support, comprising over £2 billion for helping with the protection of jobs and the costs of energy.
The spokesperson additionally underlined that the exposure to volatile global gas prices underscores the significance of UK’s plan for building a home-grown and strong renewable energy sector for further decreasing its reliance on fossil fuels.
Source credit: https://www.bbc.com/news/business-58815665