More pressure on gas market – energy prices update

The UK gas market is under further pressure after reports of an earthquake being caused by activity in a Dutch gas field.

The quake in the big Groningen gas field measured 3.4 on the Richter scale last week and prompted fresh concerns about supply with new calls to curtail production in the Netherlands, which is the UK’s third largest source of gas imports.

Groningen has been affected by earthquakes for many years as drilling around the northern town picked up pace and scope, helping to establish the Netherlands as the most important gas market in Europe.

An official request by the country’s gas regulator to government asks them to consider substantial production cuts.

Oil production cut

Meanwhile on the energy markets, energy supplier SSE reports that Brent crude closed well above the $70.00/bbl mark on Monday, with global supply constrained as producers comply with reduced OPEC production targets.

While Iraq and Venezuela have raised production, the countries confirmed commitment OPEC’s strategy. Front month settled at $70.26/bbl, although trading was subdued with Martin Luther King Day observed in the US

Russia continues to comply but has signalled it will push to leave the agreement if the oil price remains above $70.00/bbl over six months and has signalled it only wishes to commit to reduced production for six months.

Wednesday’s base is down another 10p after 45p losses on Monday and even Week 4, with much lower wind forecasts, is 25p further discounted from the £1.50 experienced at its closing assessment.

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