Activity Survey 2014

ACTIVITY SURVEY 2014

UK natural gas prices continued their steady recovery in 2013 from the recession-hit low in 2009. Reform and renegotiation of continental term contracts and the post-Fukushima tightness of world liquefied natural gas (LNG) markets both served to tighten the north-west European market again in 2013 amid near-stagnant UK gas demand. The month ahead National Balancing Point (NBP) price averaged 67.1 pence/therm ($10.50/million British Thermal Units (m BTU)) in 2013, the highest since liberalisation of the UK market in the mid-1990s. However, in dollar terms, this was still below the previous peak of $11.40/m BTU in 2008. Relative to Brent, in 2013, NBP recovered to the highest level since 2008, reaching $61/boe or 56 per cent of Brent in energy equivalent terms.

Figure 29: Dated Brent versus Month Ahead NBP Gas Prices

140

120

Brent Oil Front Month NBP

100

80

60

Oil/Gas Price ($/boe)

40

20

0

2008

2009

2010

2011

2012

2013

2014

Source: EIA

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