Gas prices have dropped from 16 to 12 per cent in the last month, but that won’t mean normal energy bills this winter, experts predict.
On the spot market, gas is trading at £2.32 per therm in the UK – that’s a sharp increase from the £7.88 per therm recorded in August.
Benchmark futures fell 9.9%, helped by mild weather and a steady inflow of liquefied natural gas. Europe has been topping up its supplies to over 90 per cent to ease fears over supply shortages as the colder months hit.
However, futures markets experts say that prices will be forecast at more than £4 per therm in the UK from next February.
But with the Russian conflict still ongoing and winter temperatures hard to predict, there are concerns for 2023. The continent has become increasingly dependent on costly liquified natural gas from the US and Gulf states to meet its energy needs.
The government’s Energy Price Guarantee, which limits the price that suppliers can charge for each unit of energy, may still cost billions of pounds, despite being cut from 24 to just six months.
Cornwall Insight has predicted the energy price cap will be more than £4,0000 per year by April so households will face huge energy bills next Spring following new chancellor Jeremy Hunt’s slashing of the support package.
Many countries have pushed for a price cap, but the bloc has not yet reached consensus on whether to cap the price of gas for end users.
Several countries, including Germany and Netherlands, fear it could exacerbate the energy crisis by failing to address the EU’s fundamental supply issues.
The measures will be discussed by European Union leaders at their summit on October 20-21 as they seek to alleviate the impact of Russia’s steep gas supply cuts on companies and consumers
Meanwhile, the IEA warned that Europe must slash its gas consumption by more than 10 per cent to prevent the risk of power rationing this winter.