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UK markets offer muted response to Ukraine gas cut

The UK gas and power markets showed little sign of concern over news last night that gas supply talks between Russia and Ukraine have failed, leading to a supply cut on Wednesday morning.

Supply disruptions between the two have in the past impacted on the gas supply security of Europe due to Ukraine’s importance as a transit area for Russian gas deliveries to countries including Germany.

But the wholesale price of winter gas in the UK firmed by less than 1 per cent Wednesday morning from 47.49 pence per therm at Tuesday’s close to 47.75 p/th shortly before 09.00.
 
A UK energy trader told Utility Week it is unlikely that the UK market will rise significantly on the news unless a further escalation emerges later.
 
Mild temperatures and ample supply through LNG deliveries have helped the UK shrug off concern over Russian gas supply to neighbouring European countries could be threatened.
 
In recent weeks Europe’s largest gas supplier sought to fix a new supply deal with Ukraine for the next three months, to follow on after the previous contract expired on 30 June. But the two have failed to agree the price.