The UK gas market should brace itself for the impact of “volatile imports” for the rest of the year, according to a weekly market update from npower.
Commenting on the gas market’s twists and turns in the last week, Ben Spry Client Portfolio Manager at npower said: “The gas system was actually very well supplied towards the start of the week despite heavy exports to Europe ahead of the IUK’s (the EU-UK interconnector) maintenance.
“However heavy interjections into storage and also volatile flows from both Norway and Holland actually meant the gas system was pretty tight towards the end of the week and this supported prices,” he added.
He said an announcement from Gassco that Norwegian flows would be “severely affected” throughout the rest of the summer and all throughout winter ’13 “added significant premium to the market”.
For the rest of the years prices could depend on how the UK can “cope” with this volatility.
Mr Spry said: “Looking forward I think much will hinge on the UK gas system’s ability to cope with volatile imports as we go through the remainder of the maintenance season, with robust LNG flows and lower demand really trying to offset those inconsistent flows from Norway and the real need for us to re-inject into storage ahead of winter ’13.”