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Oil Moves Higher On EIA Inventory Draw

Oil Moves Higher On EIA Inventory Draw

Crude oil prices moved higher…

A Slow Start To The Month For Oil Prices

A Slow Start To The Month For Oil Prices

Oil prices had a slow…

UK Still Struggling With Energy Shortages Despite Bringing Coal Plants Back

Even though the UK has brought online additional coal-fired power generation plants to survive the winter, it could still face energy shortages, according to a report from consultants Lane, Clark & Peacock.

Even if the UK increases its coal use, the country could still see 10 hours when supplied power is unable to meet the demand. As a result, the grid operator could be forced to cut off power to some energy-intensive users, the report said.

Gas and power prices are expected to be “exceptionally high” this winter in the UK.

Earlier this week, UK Prime Minister Liz Truss promised that the UK would not ration energy, and would not encourage her people to use less energy like some other countries in Europe. Truss is still firmly committed to standing up to Russia and enduring the resulting high electricity prices.

LCP reviewed one “pessimistic simulation” that factored in no interconnector imports, as France’s nuclear plant outages and Norway’s low hydro levels strips away supply during peak cold days. In that scenario, there could be 29 hours where power demand exceeds supply. That could be reduced to 10 hours if it taps into its winter reserves and supplements with coal-fired power generation.

“The irony is that as Europe baked during this summer’s heatwave, it was simultaneously sowing the seeds for further pain this winter. As a result of the extreme droughts and the lack of water that is hitting hydroelectric systems in key interconnector markets like Norway, coupled by the issues we are seeing in France with their nuclear reactors, there are significant doubts about the availability of electricity coming into GB from the continent which is critical to our security of supply,” Chris Matson, partner at LCP said.

Maston added that the current market pricing for the winter months are factoring in a “much bleaker outlook” as well as possible gas supply issues throughout Europe.

“I expect that this winter we will see coal play a crucial part in providing energy security,” Matson said.


By Julianne Geiger for Oilprice.com

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  • George Doolittle on September 23 2022 said:
    I don't think the British Pound is worth anything is the problem same be said of the euro *("disintermediation")* anyhow obviously US oil market still strongly bid beyond anything i find as problematic for the US economy excepting Housing of course which has plunged into *MASSIVE* deflation.

    This will obviously of course have knock on effects in the US economy as to both soaring borrowing costs in the USA as does forward guidance of higher rates as *"pain as pleasure"* or *"good"* as forward guidance which makes no sense but is what it is.

    Either way the US Federal Reserve will continue to raise interest rates absolutely.

    Will take a look at silver once it plunges to under $12 us dollars an ounce but of course always long physical silver. Target price for oil remains *NIL* though obviously of course not zero or negative at the moment ("no lockdowns.") Might get another huge bear market rally in US equities *("bear rips")* here in point of fact.

    I will am watching the progress of the Boeing 777X aircraft production very closely as it will have huge demand over the Boeing 767.

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