UK bypasses Putin as gas prices reach a two-year low

Britain has successfully completed an entire year without importing any Russian gas, striking a significant blow to Vladimir Putin’s energy warfare.

From the start of April last year to the end of March this year, the UK refrained from importing any Russian gas, as per the data released today. Meanwhile, British gas exports to Europe experienced a threefold increase during the same period.

The last quarter saw a record 46.2% of the UK’s electricity generated by major power producers coming from renewable sources, a remarkable rise from a mere 3.5% during the same quarter in 2010.

In response to the jolt in wholesale prices following Russia’s invasion of Ukraine last year, Ofgem today reduced its energy price cap to £2,074, resulting in a yearly reduction of £426 in the average household energy bill.

Today saw European natural gas prices plunge to their lowest in nearly two years due to high storage levels resulting from a milder-than-expected winter.

Industrial gas demand in Europe has also been weak, and new data reveal that Germany was actually in a recession this past winter, further reducing demand from its struggling manufacturing sector.

Commenting on this, Energy Security Secretary Grant Shapps said: “We have led the global front against Putin’s attempts to manipulate energy as a tool of war. By decisively cutting off Russian gas, we are taking effective measures to debilitate the Kremlin’s war efforts and safeguard the UK.”

Gas prices in Europe sink to lowest level since June 2021

European natural gas prices have plummeted to their lowest point since June 2021 as Germany’s economy slipped into a recession over the winter.

Europe’s premier economy experienced a downturn in the first quarter, as it grapples with emerging from a crisis partially instigated by unprecedented energy costs due to Russia’s aggression towards Ukraine.

Industrial demand for gas across Europe has been weak, despite the recent decline in prices, leading to a glut in the market.

Moreover, a warmer-than-usual winter has left gas storage at higher-than-average levels. The ample availability of liquefied natural gas further reduces any risk for the upcoming winter.

Philippe Francois, a high-ranking portfolio manager at Danske Commodities, indicated that the market is currently experiencing an oversupply. He added that unless there are changes, prices are likely to drop further in July.

Today, Dutch front-month gas futures, which serve as Europe’s benchmark, have decreased by up to 7.2%, dropping below €26 per megawatt-hour, a low not seen since June 2021.

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