Gas prices hit their highest level since December, but oil costs fall | Business news

As a crucial pipeline operator warns of “big consequences” for supply from a rupture, there is better news for drivers as Brent crude moves below $80 a barrel.

Wholesale natural gas costs hit their highest levels in Europe since last December, threatening a future rise in energy bills, but motorists could soon get a further fuel cut thanks to falling oil prices.

Brent crude fell more than 3 percent on Monday – to just below $78 a barrel at one point – on market speculation that major oil producers in the OPEC+ group, which includes Russia and Saudi Arabia, should ramp up exports later in the year. year.

It left the international benchmark trading at levels last seen in February.

Oil’s move lower came as natural gas costs went into reverse on news that key Norwegian export operations were shut down due to a cracked pipe.

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The damage, discovered aboard the Sleipner Riser platform, was more extensive energy infrastructure will be shut down, including the Nyhamna processing plant, which exports gas to Britain, pipeline operator Gassco said.

Alfred Hansen, the company’s head of pipeline operations, told the Reuters news agency: “This has big consequences from a supply perspective.”

He added that while there were options for bypassing Sleipner, they were time-consuming and not without risks.

It was not estimated how long it might take to repair the fracture.

The outages are affecting deliveries to the Easington terminal near the Humber Estuary – one of six major UK import and storage facilities.

LSEG data showed a 10% jump in the UK contract for July delivery to 90p per term following the announcement of the unplanned shutdown.

This price was last seen at the end of December last year.

It was a similar picture for the main European first-month contract, which also hit a high in 2024, as supplies in countries including Germany also fell.

Norway became Europe’s largest gas supplier in 2022 Russia faced an international backlash for his invasion Ukraine.

Prices have been volatile in recent weeks due to maintenance programs in Norway coinciding with attacks on Russian infrastructure.

The immediate jump in prices could have been worse if the outage had occurred in winter, the peak demand period.

Prolonged damage to imports, however, would have an impact on energy costs for households and businesses heading into the 2024/25 winter.

It wouldn’t be felt until at least September.

That’s because UK regulator Ofgem announced last month that average annual bills under energy price ceiling it would drop by over £100 from July to September.

Although this level is locked in, limited increases are already expected for the two colder three-month periods ahead.

A Gassco spokesman said: “We are working … with a repair plan and a countermeasures plan to deliver as much volume as possible to Europe.”