Balancing services use of system charges (BSUoS charges)

The BSUoS charge recovers the cost of day-to-day operation of the transmission system. Your electricity tariff consists of more than simply the cost of wholesale energy. More than half of the tariff is formed of government levies, distribution costs and the operational costs of maintaining and balancing the system. Charges levied to users of the national electricity transmission system (NETS) by National Grid, as the electricity system operator (see System operator (SO)), that aim to recover the costs of the day-to-day operation of the electricity transmission system. Generators and electricity suppliers are liable for these charges. They are calculated daily as a flat tariff across all users. BSUoS charges vary depending on the balancing action taken each day. The methodology for calculating the charges is set out in the Connection and Use of System Code (CUSC) and is under review by Ofgem.

What is BSUoS?

BSUoS is the Balancing Services Use of System charge and reflects the cost of balancing the
system – for example running the national control room, frequency response arrangements,
other ancillary services and constraint costs (paying generators to turn on or off to maintain
system security).

BSUoS charges are charged on a half hourly basis, and are based on the volume of energy put onto or taken off the transmission system in that time. For each half-hour, the BSUoS tariff is set as a £ / MWh tariff. Both generation and demand pay BSUoS charges, although interconnectors do not since August 2012.

The tariff for BSUoS is set ex post meaning that the tariff only becomes known after the half hour period has taken place.

The BSUoS charge recovers the cost of day-to-day operation of the transmission system.

Generators and suppliers are liable for these charges, which are calculated daily as a flat tariff for all users. BSUoS charges depend on the balancing actions that we take each day, but we provide a monthly forecast of BSUoS. You can also consult historical BSUoS charges.

BSUoS is the Balancing Services Use of System charge and reflects the cost of balancing the
system – for example running the national control room, frequency response arrangements,
other ancillary services and constraint costs (paying generators to turn on or off to maintain
system security).

The methodology that calculates BSUoS is set out in Section 14 of the Connection and Use of System Code (CUSC). The monthly forecast of BSUoS is provided as part of the current Monthly Balancing Services Summary report.
Balancing Service Use of System (BSUoS) is a charge that National Grid levy in order to balance the electricity system and recover the costs incurred as the System Operator. BSUoS are based on the cost incurred by National Grid ESO in balancing the system; chiefly the administrative and operational costs of the balancing mechanism, investment in future projects, cash flow from incentive schemes and contract costs. These costs are passed on to suppliers for payment.

In 2016 National Grid had to sign additional contracts with electricity generators to secure ‘Black Start’ services which would enable them to re-power the network in case of a black-out. National Grid is recovering the cost of these contracts by revising the BSUoS prices for the period April – September 2016.

July 2017 is the first month suppliers have seen the change and it will continue each month for the next 6 months.

The BSUoS charge recovers the cost of day-to-day operation of the transmission system. One of the more complex cost components, with charges calculated on a half hourly granularity and changeable on settlement runs, it has typically hovered around 0.25p/kWh for the best part of two years but began increasing sporadically from mid-2019, seemingly plateauing around 0.4p/kWh in 2020. Arguably embedded generators, by virtue of being notionally located closer to where electricity is consumed, reduce the losses inherent in transmitting electricity across the transmission network.

What has driven the BSUoS change?

The chief reason behind the sharp and now consistent increase is down to the increased reliance on wind generation in the generation mix. BSUoS is a cost driven by unpredictability as National Grid ESO experiences more issues in its continued balancing of the UK system and the sheer intermittency of wind generation in the mix has nearly doubled these costs. This is a good move for the long-term sustainability of supply but not for system forecasting and balancing. With the cost of balancing the system rising, Ofgem have decided to take a look at BSUoS as part of its Targeted Charging Review (TCR). Current proposals could see the embedded benefit either floored to zero for distribution-connected generators, or even turned into a charge as the regulator looks to protect consumer bills.

Has Covid-19 contributed to BSUoS?

The ongoing Covid-19 pandemic has subdued demand for electricity as businesses’ usage decreased and this has certainly caused spikes in BSUoS over the last few months as the impact is spread across less demand. While some of the more extreme pricing and general costs should hopefully decrease from these recent levels when we see some economic recovery, the intermittency of supply still remains and these increased costs were already evident in early-2020 prior to the pandemic.

The other issue that has impacted the market is the increase in the range of BSUoS prices we’ve seen over the past few months. During lockdown, BSUoS charges have ranged from £1.17-29.97/MWh, while in 2019 this range was nearly £10/MWh less at -£0.75-19.37/MWh. With this increased volatility comes greater risk exposure, so companies are forced to place higher risk premiums on their BSUoS pricing. This premium is a bit of a Goldilocks problem. Too high and they become uncompetitive, while too low and they face a potentially expensive spike in BSUoS, wiping out profits or even causing losses.

What BSUoS changes can we expect in the future?

The view of market analysts is that if anything, the costs could increase in the coming years as more windfarm projects begin development and previous baseline generation volume disappears from the mix, chiefly coal plants but also older gas plants who are feeling the pinch of subsidy-free generation costs. Coupled with a 5-year low in fuel costs, right now is a great time to consider fixing a new, low-rate business energy supply.

If you’re concerned about the recent cost increase and how non-energy costs might change in the future, contact UGP for a 100% fixed, 100% renewable electricity quote on 0800 669 6697.

Follow us on social media:

LinkedIn: –
Facebook: –
Twitter: –

Surviving Covid – Small businesses should switch energy supplier now!

For millions of businesses, the Covid-19 pandemic represents the greatest financial challenge they have ever or will ever be likely to face. As quarantines and closures take their toll on companies from every sector, smaller businesses are particularly vulnerable. Whilst government support schemes have offered some a much-needed lifeline, returning to profitability for many will be a long, slow process.

While businesses can do little to control the extreme external circumstances they now face, eliminating unnecessary business costs will play an important role as the UK begins to re-open and businesses start to emerge from lock-down.

In 2019, Ofgem reported that over a third of small businesses are over-paying for their #businessenergy, in some extreme cases paying up to three times more than the national average. The reasons for this vary but if you’re a small business and you’ve not looked at your energy costs for the last year, now is the perfect time to secure a great low-cost deal.

The cost of energy is at a 5-year low, and for us, this means passing these savings onto our customers.

In addition to offering great value for money contacts, giving new customers the opportunity to sign up to a great deal that could represent significant savings as they re-open, here are a few other reasons to engage with United Gas & Power:

Here’s what a few of our recent new customers have said about us:

6th May 2020

“We have started using United Gas & Power over the last few months for our business gas and electricity supply contracts. Their service is both prompt and professional and we have received market beating prices from them on both occasions we have switched supply recently.

Our Account Manager has kept us fully informed at all stages and he also assisted in resolving issues with our previous supplier who were a nightmare to deal with in what was a long-running dispute that was eventually resolved in our favour.

It is very reassuring to know that we have a dedicated Account Manager who we can contact directly. He always responds to any query/request promptly and with accurate information which Is all we ask for as a customer.”

24th April 2020

“Recently done my renewal and can’t fault them again! Nice to actually understand the impact going renewable makes in terms of carbon footprint as well! Thanks.”

1st May 2020

“Having had many issues previously, I am absolutely delighted with the service and professional attitude given to me by my Account Manager. Not only do I believe that the company has a fantastic member of staff, but they have gone above and beyond in dealing with our accounts, UGP have something special in the professional attitude of how to do business.

From a fully renewable supplier to one of the most dedicated Account Managers I have ever experienced, this is one company that doesn’t fall short of being excellent. Thanks for sorting some serious issues I have encountered, and to UGP your staff are a credit to you.”

For a no-obligation quote, speak to one of our experienced Account Managers on 0800 669 6697.

Follow us on social media:

LinkedIn: –
Facebook: –
Twitter: –

Coronavirus and the Environment: Opportunity to Learn Lessons?

It’s no secret that the short-term impact of the Covid-19 pandemic on our environment is proving to be significant. As transport and industry ground to a halt, significant reductions in carbon emissions and pollution have been witnessed in countries such as China, Iran, Spain and Italy, with the rest of Europe and the US sure to follow suit as the time in lock-down increases.

But while there’s no doubt that “staying at home” can heal our atmosphere, the reality is that the benefits are temporary and will do very little to fight the ongoing global battle against climate change. As China begins to reduce its restrictions and the nation begins its journey to “normality”, we’re already witnessing the speedy return of air pollution.

In fact, many experts in the field of climate change and naturalism have shared deep concerns over a deepening of the crisis due to a lack of focus on environmental policy and maintenance of our natural habitats as people stay at home.

What is becoming clear however, is that in the course of tackling the desperate situation that we and so many of our neighbours are facing, there are a number of key lessons that could play an important role for the future path of environmental sustainability:

1. That we, as humans can make a difference!

It is of course completely unrealistic to expect the emergency measures witnessed across the globe in current times to continue once the Covid-19 pandemic is over. However, it is absolute proof that what we do and how we behave as human beings has great power to positively or negatively impact the world around us. Could the future be one in which we video conference more and travel less? There’s no doubt that over time, small changes could make a significant difference.

2. That nations are capable of coming together in the face of adversity.

Covid-19 has often been compared to a “war” – one in which we are all fighting. The disease does not respect boundaries, race or politics. We are fast understanding that by collaborating with other counties, sharing our experiences and learning from their lessons, we are better equipped to fight this battle. Could the same apply to tackling climate change?

3. That in the face of great adversity, government bodies and people can come together to help those around them.

It is striking to realise the lengths that people will go, to help others in the face of adversity. Governing bodies across the world have, in various ways, gone to great lengths to protect their people and economies from the threats posed by the pandemic. People have come together to help those around them in need. By focusing on what unites us, rather than what divides us, great things can happen.

Globally, we are still very much in the thick of the fight against the coronavirus, and no amount of environmental healing or potential “future lessons” can make up for the tragic loss of lives still being caused by this disease.

Looking forward however, it is possible to see that if we take some key learnings from this experience and look at the potential good that can result from these challenging times, we may ultimately be able to approach environmental sustainability with fresh new eyes.

To speak to United Gas & Power about your role in helping towards a more sustainable future by using 100% renewable power, please contact us on Freephone: 0800 669 6697 or
Local: 0113 532 4411.

Follow us on social media:

LinkedIn: –
Facebook: –
Twitter: –

Great news for sustainability: Frack to the back, onshore to the fore

In 2015 David Cameron began a strategy that placed planning barriers on new wind projects in England effectively removing central government backing. This resulted in a 95% reduction of planning applications by 2018. In addition, onshore wind farms and solar power were prevented from bidding for long-term clean energy contracts that are available to other forms of renewable power.

On Monday of this week however, the UK government finally ended the block on new onshore wind turbines after four years and announced that the next round of clean energy auctions would include both onshore wind and solar technologies once again.

Why the change of heart?

Johnson’s move is a result of a number of factors, not least the lower prices of power generated by wind farms, making electricity cheaper than alternative forms of low-carbon alternatives such as nuclear power.

In addition, the government’s strategy to reach net-zero carbon emissions by 2050 is unlikely to be met without making the most of every form of renewable technology available, including wind and solar.

The Conservative’s original energy manifesto covered a number of initiatives that pledged large scale investment in green technologies. At the time, Johnson’s opponents called him a tactical player, making promises he had no intention of keeping in order to win over the 25% of Britons that now count “environmental concerns” as one of their top 3 political issues.

Furthermore, following his election, Johnson promised to make the UK “the cleanest, greenest country on earth with the most far-reaching environmental policy”. What many considered an empty promise appears to be coming to fruition, at least on the basis of Monday’s announcement.

What next?

Under the new plans announced this week, wind farm and solar projects will be eligible to apply for a new “contracts for difference (CFDs” auction in 2021, potentially resulting in new wind farms being built as soon as 4 or 5 years from now. Onshore wind in particular is now so cheap to generate that its floor price is expected to be at or lower than current market prices making it free of government subsidy.

Monday’s announcement is a start – however for onshore wind to truly take hold, In England planning blocks on turbines will need to be lifted. In contrast, Scotland, lacking the onerous planning rules present in England, has already drawn up a list of a number of potential wind farm projects north of the border.

Ahead of this year’s global climate talks in Glasgow, the UK’s approach to environmental sustainability is stepping up its game. As fracking is fighting to survive, solar and onshore wind comes to the fore once more. Coupled with plans to bring forward the ban on the sale of new petrol and diesel cars to 2035, could this be the beginning of a new era that truly sees the end of fossil fuels?

Follow us on social media:

LinkedIn: –
Facebook: –
Twitter: –

Top Energy Tips for Micro Businesses

At the end of 2019, Ofgem in its “2019 State of the Energy Market” report, stated that more than a third of the UK’s microbusinesses pay more for each unit of gas and electricity than larger businesses. These small businesses often have a bad deal when it comes to business energy, and in extreme cases can pay up to three times the average unit than their larger business counterparts.

In contrast to the domestic energy sector, business energy contract terms are usually negotiated with suppliers, and bespoke agreements made between them depending on usage. The more energy a business uses, the better placed it is to negotiate favourable prices and terms. Microbusinesses however, with typically low usage volumes lack the bargaining power to strike the best deals with some suppliers (or so they think) and according to Ofgem, in 2019 very small businesses paid almost twice as much as the average cost across all business customer segments.

If you’re a microbusiness and you haven’t shopped around for energy quotes in the last 12 months, there’s a high chance you’ll be paying too much for your gas and electricity. Follow our key tips to ensure you’re getting the best deal for you.

1. Are you a microbusiness?

There’s a fair amount of confusion as to what actually constitutes a micro business. However, answering this question is critical because microbusinesses benefit from different rules than larger enterprises. For one, microbusinesses can give notice at any point during their contract and if they’re on a fixed tariff, the energy supplier must state the contract end date on every bill.


In relation to the energy industry, you’re classified as a microbusiness of you meet one or more following criteria:

Most energy companies will ask whether you qualify for microbusiness status at point of sale, however the responsibility lies with the customer to tell the supplier so it’s important you know where you stand. Also remember that if your business grows, you might no longer qualify for microbusiness status and you should tell your supplier immediately.

2. Dedicate someone to the job

One of the reasons why larger companies often secure more favourable rates than small businesses is because they’ll often have an employee whose responsibility it is to manage the organisation’s energy contracts. This person will keep track of when contracts are coming to an end and routinely scour the market for better deals.

In Ofgem’s “2019 State of the Energy Market” publication, it reported that more than a third of microbusinesses are on expensive default contracts, simply from not knowing when their contracts were coming to an end and planning accordingly.

It’s important that smaller organisations dedicate this responsibility to someone who can make sure that regular market comparisons are made, otherwise you may be stuck on a significantly higher rate for a long time.

3. Create a list of what’s most important to you

Most businesses have a wish list when it comes to selecting their energy supplier, but there’s more to an energy contract that works for you than just low price. Do you get frustrated when you can’t get through to someone in customer services? Does your existing supplier send you bills that are impossible to understand? These types of frustrations are common and understanding these will help you to narrow down your search. Run through the quick checklist below to get a deeper sense of what type of company might best suit your needs:

4. Compare and switch

Armed with all the information about your existing supply and a checklist of what you’re looking for, it’s now time to compare suppliers. Many energy companies will guarantee to beat your renewal rates and many will also be prepared to negotiate with you. Don’t underestimate how important your business is to an energy supplier. You may only consume a small amount of energy at present, but your business may grow.

In addition, in a saturated market, energy companies are acutely aware that they are in a competitive market and that happy customers refer others. A good energy supplier will value its reputation and thrive on word of mouth as well as positive recommendations, so you should expect to be treated with the same courtesy and helpfulness as any other business.

If you are still unsure and would like to speak to one of our team, to see if you qualify as a microbusiness, contact us today.

Coronavirus hits global solar energy supply chain

The impact of the coronavirus outbreak, re-named COVID-19 is now having more far reaching consequences for the European energy sector. As we approach the end of the second month of the outbreak, factory shutdowns and production disruptions in China are having widespread impact on Europe’s solar panel stocks in particular, which are now significantly diminished.

Many manufacturing sites in China shut down after the extended Lunar New Year holiday, ceasing production of solar panels and other components in an attempt to control the spread of the virus. With no imminent plans to return to production, at least until March, the global impact on the solar supply chain is significant and widespread.

China is the largest producer of solar panels and components, responsible for 95% of the world’s supply, with the remaining 5% manufactured in the United States. This single country dependence on China renders the solar industry particularly vulnerable as the virus currently shows no sign a definite end. 

Follow us on social media:

LinkedIn: –
Facebook: –
Twitter: –

The UK’s ban on diesel and petrol cars: get your business ready

On Tuesday this week, the Prime Minister announced the ban on the sale of all new petrol, diesel and hybrid cars (including plug-in hybrids) from 2035; five years earlier than was previously planned. The ban, which will mean consumers will only be able to buy electric or hydrogen cars and vans from 2035, comes in the wake of new expert predictions that the UK will not be able to achieve its zero-carbon emission target by 2050 if the country waits until 2040 for the ban to commence.

One of the major stumbling blocks in anticipation of the 2035 ban will be the UK’s charging infrastructure. There have been a number of government incentives to improve the nation’s charging network and this has resulted in substantial growth, from only a few hundred public charging stations in 2011 to more than 10,600 at the start of this year providing 29,700 charge points.

However, despite the growth of the UK charging network, quick access to convenient charging points is still the key concern for car purchasers and no clear solution has been provided for how the UK’s millions of apartment residents or those without off street parking, will cope once EV’s become a way of life.

The role of the employer in the uptake of electric vehicles across the UK is vital. The workplace is one of the key locations (second only to the home), where vehicles tend to be parked for long periods of time, representing the ideal opportunity for charging, especially for those who do not live in properties with off-street parking.

Why businesses should consider installing EV charging stations now…

1. Employee Engagement & Attraction

Having access to workplace charging is a leading-edge benefit that sets organisations apart from competitors, playing a key role in both the attraction and retention of great people. What’s more, in the years to come, charging facilities at the workplace will become a necessity – not simply a “nice to have” as they currently are.

For property owners and developers in particular, planning ahead for EV charging stations will be critical in their ability to remain relevant and competitive as a properties’ value is enhanced to buyers and renters.

2. Corporate Social Responsibility

Currently, transport is the UK’s most polluting sector, representing over a third of the UK’s C02 emissions. Transport is also the major cause of air pollution in cities and costs the UK in the region of £6bn per year.

Installing EV charging points at the workplace is a powerful, visible carbon reduction initiative. Organisations who install charging points make a physical demonstration of their commitment to sustainability and make a powerful, positive impression on the employees, customers, suppliers and other stakeholders that visit their premises.

3. Incentives for Company Car Fleets

To date, over 70% of plug-in hybrid cars purchased in the UK have been bought by company fleets. Falling purchase prices, environmental factors and tax incentives make EVs the logical choice for many company car and van fleets.

Electric vehicles are also cheaper to run than their petrol or diesel equivalents and fleet maintenance costs can be significantly less due to EVs having less moving parts than traditional engines. Across large fleets of cars, the savings can be significant.

Additionally, government planned initiatives such as Clean Air Zones and Ultra-Low Emissions Zones across a number of UK locations will result in increasingly high costs for traditional petrol and diesel vehicles moving in and around cities.

4. Early Adopter Benefits

Government grants are available for early adopters of car charging station installations. The Workplace Charging Scheme (WCS) reduces the purchase and installation cost of a new workplace charging station by up to 75% and personal grants are also available for private installation when purchasing an electric car or van. As the UK charging network expands, it’s unlikely these incentives will remain in place indefinitely.

How UGP can help

If you’re interested in discussing the options for installing an EV Charging Station at your workplace or commercial property, we’d like to talk to you.

At United Gas & Power, our specialist advisors can help with everything from your initial consultation to determine your needs, advising/supporting you through the funding process as well as all aspects of installation, account management and support.

Call us on 0800 669 6697 and we’ll be delighted to discuss your options in detail with you.

Follow us on social media:


LinkedIn: –
Facebook: –
Twitter: –

10 Questions Energy-Efficient Businesses Can Answer

There are many ways to make your business more energy efficient, but first you need to understand how your business uses energy, how that relates to the prices you’re charged, and the overall effectiveness of your energy-saving initiatives.

In this blog, we suggest 10 questions that all energy-efficient businesses should know the answers to.

Question 1: How long are lights on in my business, what steps have we taken to minimise their use and are those steps proving effective?

Are the lights on in your business all the time or just at set times during the day? Have you checked all areas of the business, including storerooms and places not frequently used?

Question 2: Who is responsible for turning off the lights at the end of each day?

Having someone who has the responsibility to promote energy-efficient work practices will help you achieve your goals.

Question 3: What temperature is the heating set to run at, and how is this temperature monitored and controlled?

Raising or lowering the temperature of heating in the workplace just one degree can have a significant impact on your bills, so it’s important that you know what temperature yours runs at and who is responsible for setting it.

Question 4: What temperature are my employees comfortable working in?

This is an important question as you don’t want employees to be uncomfortable, but you might be able to reduce the temperature.

Question 5: Does the heating run at the weekend, and how is the heating operated at times when the business is open but not running at full capacity?

Controlling the heating when the business is closed or running with lower staffing levels (such as at the weekend) can help you cut energy bills.

Question 6: Do air conditioning units run constantly during the summer? What steps have we taken to minimise their use, and are those steps proving effective?

Air conditioning units are important for comfort, but they add to your energy bills. Minimising their use is important.

Question 7: What is my average monthly gas and electricity consumption, and was last month higher or lower than average?

This is more than knowing what you paid – do you know how much energy you used? and do you track/monitor that usage over time? If it was higher or lower than the average, do you know why?

Question 8: What business gas and electricity tariffs are we currently on, and what steps have we taken to ensure we optimise our energy use within those tariffs?

Understanding how your energy supplier charges for gas and electricity and what tariffs apply to different times of the day may help you to manage your business operations accordingly and reduce your bills.

Question 9: When did we last take the time to compare business energy prices to ensure we are on the best deal?

Energy tariffs change regularly, so it is important to check that you are getting the best prices possible at regular intervals.

Question 10: When are the contracts due for renewal with our current business energy suppliers?

You might be able to get a better deal, particularly if you plan ahead so the switch is made as soon as possible.

Knowing the answers to these questions requires a proactive hands-on approach and will take time, but the overall result is that you’ll potentially save money and reduce your organisation’s carbon footprint at the same time.

If you’d like further advice on reducing your business energy costs, contact United Gas & Power on 0844 318 0044.

Follow us on social media:

LinkedIn: –
Facebook: –
Twitter: –

Transfer Deadline Day 2010 UGP announces double signing

United Gas and Power Welcomes New Team Members

United Gas & Power (UGP) are delighted to announce that they have successfully completed a double swoop with the signing of Sheikh Taufique and Sarah Cox on Transfer #DeadlineDay!

Both Taufique and Cox come in with a wealth of experience and look to be shrewd additions by manager Michael Coverdale. Taufique was delighted to be joining the team and had this to say “It’s a dream come true to join Leeds based energy supplier, United Gas & Power. As soon as I witnessed the fabulous facilities at UGP HQ, I knew it was the place for me to propel my career to the next level.”

Working for a renewable supplier was key to Sarah Cox making the move “When I met the Manager and he explained the impact the company was having on moving businesses to a renewable supply, I knew this was the place for me. I think a lot of businesses are keen move to a renewable supplier but have often thought it was too expensive. I have already seen that UGP are market leading on price whilst still offering renewable energy, so the decision became very straight-forward. I can’t wait to get going.”

Following some intense negotiations in December, Coverdale was delighted to complete the double swoop. The pair go straight into the sales team that was instrumental in driving UGP onto the Sunday Times Fast Track 100 UK companies in 2019.

“I am delighted to bring the pair in” said Coverdale. “They have already had a great impact in the short time since joining and I can see them having a great career with the company. It’s fantastic news and I am sure our loyal fanbase will be hugely excited by the announcement.” 

As part of their sustainability pledge, one of UGP’s first actions following the signing will be to plant a tree In association with the Yorkshire Dales Millennium Trust for the 2 new additions, as they do whenever a new customer or employee joins the company. Coverdale will no doubt be hoping that the double signings will also grow into fantastic recruits for the company!

Follow us on social media:

LinkedIn: –
Facebook: –
Twitter: –

Oil Prices Fall Over Demand Concerns As Coronavirus Spreads

Oil prices dropped further on Thursday falling almost 15% in three weeks. This has been propelled by the ongoing concern and consequences of the coronavirus outbreak in China. The expanded travel restrictions in China have further lessened the demand for oil in the world’s most populous country. The Chinese Football league has put an indefinite postponement to all fixtures and a number of airlines have reduced or suspended flights to the region. Authorities have now confirmed over 8,000 cases with over 200 fatalities and the World Health Organisation has declared a global health emergency.

Market prediction models are being put together in the event of the worst case scenario, should the outbreak spread to become a global epidemic and economists predict that China’s GDP could fall by up to 1% due to the virus. If air passenger traffic drops by half in the first quarter of 2020, it would result in a 300,000 barrel a day decline in jet fuel demand alone.

OPEC (the Organisation of Petroleum Exporting Countries) was due to meet in March, but is now looking to bring their assembly forward to February in order to tackle the decline in oil demand and prices. Oil markets are familiar with dealing with supply disruptions and political volatility within oil producing countries; the supply disruptions currently affecting Libya as an example. However it’s rare for the markets to suffer prolonged demand issues due to a virus outbreak. A comparable situation can be made with the SARS Virus outbreak in 2003 which killed over 700 people worldwide, half of which were from China.

The outbreak is less than a month old and the rate of people infected is accelerating daily. The humanitarian concern is of course the first and foremost concern as the world’s markets react in tandem.

Global Oil Demand By Country
Global Oil Demand By Country

Follow us on social media:

LinkedIn: –
Facebook: –
Twitter: –