Tightening supply and rebounding demand…
Crude oil prices rose today…
Update: Green Energy, a small-sized, and Avro, a medium-sized energy retailer just declared bankruptcy, leaving 1.5 million households scrambling for a new provider.
More UK energy suppliers are set to go bust as soaring gas prices are putting an unprecedented cost burden on smaller electricity and gas providers, the head of the UK's energy regulator said on Wednesday.
"We do expect more (suppliers) not to be able to face the circumstances we're in, but it's genuinely hard to say more than that, partly because that means predicting what may happen to the gas price," Jonathan Brearley, chief executive officer of Ofgem, the independent energy regulator for Great Britain, said at a hearing of the business committee at Parliament, as carried by the BBC.
The UK has been bearing the brunt of the gas crisis in Europe, with wholesale gas prices surging to record highs in recent days.
Europe's tight gas market, low wind speeds, abnormally low gas inventories, and record carbon prices have combined in recent weeks to send benchmark gas prices and power prices in the largest economies to record highs. Almost daily, gas and power prices in Europe surge to fresh records, putting pressure on governments as consumers protest against soaring power bills.
The UK government is looking to ensure uninterrupted energy supply to customers as several energy providers have already gone out of business due to the high costs. Ofgem has been appointing other energy providers to take on customers of the failed energy businesses in recent days.
And according to Ofgem's CEO, more providers will go out of business.
"It's not unusual for suppliers to go out of the market," Ofgem's Brearley said.
"I think what is different this time is that dramatic change in the costs that those suppliers are facing," he added.
"In the event an energy supplier fails, we are committed that consumers face the least amount of disruption possible – and there are clear and well-established processes in place to ensuring this is the case," Brearley and the UK's Business and Energy Secretary Kwasi Kwarteng said in a joint statement earlier this week.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.