Prices for natural gas are once again higher in the UK than in the US due to heightened concerns over the predicted imminent winter freeze.
Earlier in the year natural gas prices in the UK were roughly double prices in the US. However, following the destructive effects of the US hurricane season on energy infrastructure in the States, a sudden rise in demand resulted in US prices soaring above UK prices.
Because of the dramatic turnaround in US/UK price comparisons, predictions, as recently as last month, were that the UK would suffer a shortfall in natural gas supplies due to a major diversion to the higher revenue-yielding US.
However, the combination of concerns over general shortages and the perceived increased demand needed due to the predicted cold winter have resulted in UK prices once again topping US prices on the prompt markets.
Currently Bloomberg has quoted the ICE Futures exchange as reporting prompt gas prices (prices for gas to be delivered in around a month) are 81 pence a thermal unit, a 4% rise in a day and at a three month high. Meanwhile, Merrill Lynch has forecast UK prices could reach GBP1 per therm.