Is gas price wobble due after shock oil price drop?

Global oil prices hitting a two-year low may end up affecting British gas prices, suggest analysts. The markets have been “really flat” this week, according to the new weekly Y […]

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By Vicky Ellis
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Global oil prices hitting a two-year low may end up affecting British gas prices, suggest analysts.

The markets have been “really flat” this week, according to the new weekly Y Report from Inenco, “largely because there’s been no real change to supply and demand fundamentals”.

Matthew Osborne, Risk Manager at Inenco explained: “Both seasonal contracts and shorter-dated contracts haven’t really moved, the impact on price has been relatively weak.”

But “really volatile” Brent oil prices – the international oil benchmark – means speculation is mounting that funding for shale gas may be affected, he added.

Mr Osborne said: “In fact it’s fallen to a low not seen in two years. The result of that is that many are beginning to speculate that actually shale gas projects that rely on a high oil price for their finance may begin to get into trouble.”

He added: “That hasn’t yet fed into the gas market but it is something that is potentially a concern on the horizon.”