Gas prices skyrocket following development of strike action at LNG depot in Australia

With day ahead wholesale gas prices jumping 32% in the last 2 days of trading, it proves that it doesn’t take much to force the market into panic amid further threats of LNG shortages from Australia.

You might might think what gas shortages in Australia has to do with price hikes in the UK, but with Australia being a primary source of gas for Asia and China, they will seek gas originally destined for Europe in the event that supplies from Australia fail to meet demand.

If the strikes last for a period of time and China start to compete heavily for LNG shipments originally destined for European shores, the increased competition will drive a much higher premium and the ship will simply go to the country that bids the highest amount of money.

The timing isn’t great either as its about to get colder and Europe will need to keep LNG arriving at its shores to avoid eating into its reserves.

Importing large volumes of LNG (liquefied natural gas) has been Europe’s answer to the void left when Russia turn the taps off in 2022, so it can ill afford for much disruption as it doesn’t have an alternative.

It’s really important as a business that you keep a track on what’s happening with prices in these extremely volatile times as it will make such a big difference to what you pay for your electricity and gas.

With prices being so high at the moment, our weekly price trends update is designed to help explain what the key drivers are and provide you with all of the information to make a well informed decision on when to agree your next contract.

If you need to compare prices for your meter now, please click here to see the latest rates for your meter.