How Strikes Are Affecting Global Gas Prices
Australia’s Chevron Strikes and Gas Price Fluctuations
Strikes in Chevron’s Australian facilities have resulted in global gas price instability. European natural gas prices surged by 13% following walkouts in Australian plants. The negotiations between parties are ongoing and an agreement is yet to be reached.
Why Walkouts Affect Gas Prices
The strikes at these plants affect gas prices around the world by casting doubt over the reliability of supply. Last year, these Chevron facilities provided 7% of the world’s liquefied natural gas. However, this needs to be viewed in context.
The war in Ukraine saw Russia cut off natural gas supplies to much of Europe. This resulted in a spike in gas and energy prices and countries were forced to explore alternative energy sources. LNG proved to be an effective stop gap – and Australia is one of the largest exporters of LNG in the world.
Energy prices have stabilised since the start of the war, but the pressure remains on price for consumers. With the global gas market maintaining a fine balance, traders are on edge over supply disruptions and shifts in supply have the potential to affect wholesale gas prices. In turn, this affects what the consumer can expect to pay for energy.
However, analysts have posited that the strikes are expected to be temporary and are unlikely to present any tangible risk to the market. The facilities have run on average at 80% of outputs (with a fault causing minor disruptions). Key gas buyers are also said to have sufficient inventory in the build-up to winter in the northern hemisphere (the EU’s natural gas storage is currently at 90%).
Winter Is Coming: How To Mitigate Energy Costs
Commentators have said that energy prices may rise if the Chinese economy bounces back and winter temperatures plunge. What can you do to weather gas and energy price fluctuations in response to global events?
Focus on Energy Saving
The most obvious way to reduce gas and energy costs is to cut consumption. Collectively, cutting demand increases the likelihood of meeting demand using existing resources – which has a bearing on wholesale costs and stability.
At a business level, the first step to boosting energy efficiency is to understand usage. In doing so, you are best placed to identify areas of potential saving without disrupting operations. A business energy audit – conducted by a third-party energy firm – provides in-depth analysis and a roadmap for efficiency and maximised contract value into the future.
Shop Around for the Best Contracts
When it comes to energy savings, negotiating the best contract for your business is key to avoiding unnecessary costs. This does not simply mean choosing the cheapest quote. It means understanding the terms and selecting the plan that’s best for your business’s specific needs. It also means examining supplier stability to prevent incurring costs in future.
Whether your contract is up for renewal or you are laying the groundwork for future contracts, it is worth doing your homework to get the best deals. Getting expert insights and getting professional advice on tariff and terms comparisons have the potential to save time and effort. Working with the team at Smarter Business also means we can leverage our supplier relationships to broker the best tariffs for your needs.
Explore Alternative Energy Sources
A phased approach is the least disruptive way to make the shift to renewable energy sources. Working with energy consultants guides the process – whether you are looking to retrofit existing systems, make gradual changes, or work towards an energy overhaul to achieve net zero.
Work With Smarter Business For Simplified Commercial Gas and Electricity
Get in touch with Smarter Business today to find out more about our gas and electricity consulting solutions and tools.