In euro terms, Irish wholesale gas prices are 45% lower on average this month compared to September 2015.  These losses continue to be attributed to on-going healthy supply, decreased demand year on year and a stronger euro to sterling exchange rate. Wholesale gas prices are down 13% month on month.  A significant supply overhang pushed the prompt market to lows not seen since 2009 during the first half of the month.

To date in September, the average day-ahead price for gas, the contract for gas delivery tomorrow, is 1.06c/kWh (cents per kilowatt hour).  This compares with an average price of 1.92c/kWh in September 2015.  Irish wholesale gas prices are a staggering 52% lower in euro terms compared with the average monthly price recorded for the month of September over the previous three years (2013-2015). This has had a significant impact for lowering the energy costs of many Irish businesses purchasing gas on the wholesale market; particularly for users in the industrial and commercial sector.

Joanne Daly, Senior Energy Analyst at Vayu said that on-going healthy supply and mild weather continue to put downward pressure on prompt prices.  “Temperatures are expected to be above normal in the UK and throughout most of Europe during the last week of September. Weather forecasts are also signalling strong winds for the same period.  These point to a period of continued low gas demand for the remainder of the month, which could keep a cap on any potential gains due to supply issues. 

Storage levels across Europe are quickly filling up and are at 86% capacity. This trend will continue until we see heating demand return.  UK storage levels remain at 52% and are unlikely to grow beyond that prior to winter due to the on-going restrictions on the Rough storage facility, which houses 70% of the UK’s total storage capacity.   Although withdrawals traditionally begin in early October, if the weather remains as mild as it has been recently, these withdrawals may not be necessary until later in the winter period, which may also be easing any concerns surrounding security of supply.”