What’s happening in the markets and why?
Following the drop off in the UK gas and power markets last week, so far this week we have seen prices continue in the downward direction.
The market continues to wait on news from talks between Chevron and the unions which have been hosted by Australia’s industrial arbitrator, the Fair Work Commission. Today they will hold a final round of talks ahead of planned strike actions as ongoing disputes over pay and conditions remained unresolved. Workers are set to begin brief work stoppages and ban certain tasks from Thursday at Chevron’s Gorgon and Wheatstone facilities and plan to escalate to a total strike for two weeks from 14th September if their terms are not met.
Despite the threat of a strike at the Australian LNG facilities, the ongoing maintenance in Norway and several small unplanned outages in Norway and the UK, the market appears to be overlooking these concerns and have continued to ease. High gas inventories as well as weak demand in the UK and Europe is outweighing the upside.
What should energy buyers look out for?
Further potential supply disruptions coming either from changes to the Norwegian maintenance schedule or escalation of the LNG strike action in Australia.
What would you recommend?
If you are on a flexible supply contract and have not started hedging for the winter period but need a level budget/price certainty, then we would recommend you start looking into this period given the recent drop off in prices.
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