Prices go up as BP pauses oil shipments through Red Sea

A suspension to vessels traveling via the Red Sea and reduced Norwegian flows forced Gas prices up on Monday.

Prices across the curve surged during afternoon trading with the January-24 contract posting some of the largest upside, gaining more than 0.19p/kWh when compared to its previous settlement.

The sudden gains came after an announcement from oil and gas giant BP (British Petroleum) to pause shipments traveling through the Red Sea, with others concurring on the decision shortly after.

The news will result in vessels (likely including LNG shipments) needing to divert and use alternate routes to avoid the region, potentially increasing transit times by up to ten days.

Additional increases perhaps came from a reduction in flows from Norway. According to data from offshore operator Gassco, nominations into the St Fergus terminal fell by more than 58% day-on-day despite no planned or unplanned outages.

This morning, gas prices have reversed yesterday’s gains with the Summer-24 contract last trading circa 0.22p/kWh below its previous closing price.

If we check the latest half hourly period at the time of writing (09:00 – 09:30), electricity demand in the UK is 38.38 GW’s.

Fortunately, the UK currently has high winds which is helping reduce our gas demand.

Only 31.03% (12.45 GW’s) of the total electricity is being generated from gas at the moment with wind turbines contributing more at 15.68 GW’s (39.06%). Nuclear remains as the next biggest contributor at 11.53% (4.63 GW’s).

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