23.10.202607:51:41UTC+00UK Gas Prices Hit Fresh Multi-Year High Amid Tight Supply

UK natural gas prices have risen toward 230 pence per therm, setting a new high for 2022 as global supplies tighten. Persistent disruptions to LNG shipments from the Middle East have pushed British gas prices to roughly three times their level at the start of the year. Further stoking concerns, gas production in the North Sea—typically meeting about one-third of the country’s winter demand—is expected to decline by around 5%, according to the UK gas grid operator.

To help offset this shortfall, LNG imports into the UK are projected to increase by about 5%, while Norwegian pipeline deliveries are forecast to edge up by roughly 1%. The gas network operator maintains that the UK will retain sufficient supply capacity even in worst-case scenarios. However, strong global LNG demand may intensify competition for cargoes, potentially driving prices even higher.

Some relief could come from additional output from the recently approved Jackdaw field, which is expected to begin supplying gas to the UK by the end of this month.