Gas alert as demand and prices rise

[Little John]

Storage still being filled only slowly, I would have expected filling at the maximum possible rate, given the low price.
I can only conclude that they expect a furthur fall in prices ! gas storage is a comerical undertaking and they would wish to avoid buying gas at 100X and then after the expense of storage only being able to sell it for say 70X.

Looking at the news from Ukraine, and Iraq, I doubt that prices will stay this low for long.

What if they've already bought it, but are deliberately arranging with the primary suppliers to store it further back up the supply chain, such that they are able to charge maximum retail prices this winter due to "shortages" in the energy companies' reserves.

[RenewableCandy]

Steve you're a fecking devious bastard, and almost certainly right.

[adam2]

Gas to Ukraine cut off.
Not certain what, if any, effect this will have on us.
In theory gas for onward transit should pass through Ukraine untouched, in practice I think that the Ukrainians might help themselves, and that Russia might then turn it off at source to prevent this.

There are other routes for gas not via Ukraine, but IIRC these are limited in capacity.
Any increased reliance on "not via Ukraine" routes would render these other routes attractive targets for industrial disputes, increased transit charges, or even terrorist attack.

The wholesale gas price has increased, but not by much, and from a very low price by recent standards.

We are burning more gas in power stations due to the closure of coal burning capacity.

[Little John]

Steve you're a fecking devious bastard, and almost certainly right.

I do try. Or, at least, my wife tells me I'm very trying.

[adam2]

Gas storage now being filled at a good rate, perhaps they listened to us !

Prices have increased a little but are still low by the standards of recent years.

[cubes]

Maybe they are filling it with gas... nitrogen

[vtsnowedin]

I do try. Or, at least, my wife tells me I'm very trying.

I don't doubt that one bit. My own, patent beyond all reason, wife has said much the same to me.

[adam2]

After a brief period of rapid filling, stocks have been nearly static for some days.
I wonder why ? It is true that gas demand is above average due to more being used for power generation, but on the other hand the low price suggests ample near term supply.

With storage now about 88% full, it could be argued that filling is not urgent, but still better full than not full IMHO.

[PS_RalphW]

Beach supplies ( ie. North Sea production) has fallen below 100 mcm, I think for the first time since we peaked. I guess this is the summer maintenance dip, but it is indicative of how little we have left.

I guess no point filling up on expensive LNG when cheaper NG will be along in a few weeks.

[PS_RalphW]

Gas demand remains below normal in the Indian summer, storage is effectively full, but the price is creeping up steadily and is now above 50p/therm, up from 35 p/therm a couple of months ago. Winter prices in recent years have been as high as 70p/therm.

Anyone seen a long range forecast? I heard rumour of a cold winter.

Or is the Ukraine situation still causing jitters?

[biffvernon]

Anyone seen a long range forecast?

Impossible to forecast.

[adam2]

Looking a bit better than has been the case in some years.
Storage very nearly full, and the remaining capacity being slowly filled.
Prices around 50 pence a therm which is high but not exceptionally so.
Increased wind turbine capacity tends to reduce gas burnt for power generation.

On the other hand, closure of coal burning power plants increases gas demand, as does the extended shutdown of several nukes.
Doubts exist as to the sufficiency of generating capacity for this winter. In the absence of sufficient other generating plant, then the emergency OCGT units might see a fair bit of use, that would consume gas at an alarming rate.

The Ukrainian situation is now yesterdays news, but is far from peaceful and could affect supplies.

And what about the consequences of an Ebola panic nearer to home ?
Partial economic shutdown reducing gas demand ?
Or panics, staff shortages and quarantines affecting imports ?

[clv101]

On the other hand, closure of coal burning power plants increases gas demand, as does the extended shutdown of several nukes.
Doubts exist as to the sufficiency of generating capacity for this winter. In the absence of sufficient other generating plant, then the emergency OCGT units might see a fair bit of use, that would consume gas at an alarming rate.

This will take a bite out of this winter's capacity:
Major fire at Didcot B power station

A major fire has broken out at Didcot B Power Station, Oxfordshire Fire and Rescue has said.

The gas-burning power station has been in operation since 1997 and can supply the power to up to one million households, according to energy company RWE npower.

That's 1,360MW of CCGT!

[adam2]

Gas supply situation now looking OK for the remainder of this winter. By common sense standards we are now one third of the way through winter, but have used a lot less than one third of the gas.

Consumption of gas has fallen significantly, not just due to milder weather. There has also been a systemic reduction in demand to well below the levels expected for the prevailing weather.
Higher efficiency standards for boilers and for new homes must be starting to reduce gas consumption.
The growing contribution made by wind power is also reducing gas burnt for power generation.

The weather is forecast to remain generally mild for the next two weeks, and whilst severe cold is entirely possible after that, it is unlikely to be prolonged.

[cubes]

The weather is forecast to remain generally mild for the next two weeks, and whilst severe cold is entirely possible after that, it is unlikely to be prolonged.

Does this mean we can expect siberian weather for the next 6 months?