48 Saturday January 1 2022 | the times
Business
Warmer Christmas
weather takes heat
out of gas price rise
Gas prices fell by a fifth yesterday as
mild weather and the prospect of more
supplies arriving in Europe helped to
drive a continued sell-off from record
highs before Christmas.
British month-ahead gas prices fell
below 200p a therm for the first time
since mid-November and were down
by 19 per cent at 171p a therm by mid-
afternoon. The benchmark UK price
has fallen by more than 60 per cent
since touching record highs of 470p in
intra-day trading on December 21, mir-
roring declines across Europe.
Recent weather has been unseason-
ably mild, reducing demand for gas for
heating, and cargoes of liquefied natu-
ral gas are arriving in Europe after
being lured by the high prices that were
on offer before Christmas.
The sell-off from December’s un-
precedented rally provides limited
respite to consumers, industry and the
government, all of which are facing the
fallout from 2021’s surge in energy
prices, with record household bill
increases forecast for the coming year
amid warnings of a cost-of-living crisis.
Gas prices remain well above histori-
cal norms and are three times higher
than a year ago — the biggest annual
increase on record, according to Refini-
tiv data going back two decades.
Brent crude, the benchmark oil price,
has also risen strongly in 2021 and was
on track to end the year up about 51 per
cent or $26 a barrel higher at more than
$78. That would be the biggest percent-
age rise seen since 2016, when oil rallied
52 per cent in the year, and the biggest
rise in absolute terms since 2009.
The rallies in oil and gas have beendriven in part by a recovery in demand
after lockdown-induced lows of 2020.
Oil prices have been boosted further by
continued supply curbs by the Opec+
alliance of producer nations, which are
withholding millions of barrels per day
from the market.
Gas prices have been particularly
strong in Europe, where storage facili-
ties were unusually low after a long,
cold winter last year and with Russia
limiting supplies by pipeline, leaving
the Continent competing with Asia for
scarce cargoes of LNG. Cold weather in
the run-up to Christmas intensified
fears of a supply crunch, but this has
now eased.
Tom Rodgers, European gas analyst
at Icis, the price reporting agency, said:
“The price has collapsed in the past ten
days faster than it spiked in the equiva-
lent period before.” He said that the
price rise before Christmas had “en-
ticed a large fleet of LNG cargoes to
head to Europe, which is now starting
to land on these shores.
“Meanwhile, we have had very warm
weather for the time of year, intensify-
ing the drop in demand that usually
comes with the festive period. Both
these have combined to slow with-
drawal rates at storage sites. Finally, we
have seen Russian flows via Ukraine
[start] to creep up.”
Icis figures show day-ahead prices
closed at 128p per therm yesterday after
peaking at 450p on December 21.
Rodgers said this was “still a very high
price.
“With months of winter left, I would
not say this period of extreme volatility
is over. Another period of cold weather
and sluggish supply and we could easily
spike higher once more.”Emily Gosden Energy EditorPressure grows on boards
to boost ethnic diversity
Companies must step up their efforts to
recruit more directors from ethnic
minorities because they have failed to
meet targets set out by a government
review, the Institute of Directors has
demanded.
The institute, one of the business
world’s leading bodies, said that
progress in increasing ethnic minority
representation in leadership positions
had been “too slow”.
Its comments came before yester-
day’s deadline for all FTSE 100 compa-
nies to have at least one director of
colour on the board. The target was set
by a 2016 government-sponsored
review by Sir John Parker, the board-
room veteran. The review also recom-
mended that FTSE 250 companies
should meet the target by 2024.
The recruitment of more diverse
directors has accelerated, but a fifth of
FTSE 100 companies still lack any
board members from ethnic minorities,
according to data collected in March.
The Parker review is due to publish
updated figures this year.
Alex Hall-Chen, senior policy
advisor at the institute, said that “busi-
nesses need to take action to create a
culture of diversity and inclusion to
develop a pipeline of leaders for their
boardroom”.
A spokewoman for the Department
for Business, Energy & IndustrialKatherine Griffiths Banking Editor Strategy said: “The progress made to
increase ethnic diversity on FTSE
boards is very promising, with the
number of companies having ethnic
minority directors on their boards
increasing from 52 in 2020 to 81 report-
ed a year later.” Seventy-four FTSE 100
companies had ethnic minority direct-
ors on their boards by November 2020,
up from 52 in February that year.
Arun Batra, a partner at EY and an
adviser to the Parker Review, said that
progress was encouraging but that“there can be no rest until all compa-
nies have met the target”.
Zara Nanu, chief executive of Gap-
square, which specialises in analysing
pay disparity, said: “Agreeing targets for
greater board diversity will prompt
organisations to view this as a long-
term strategy, not a one-and-done
tactic. Diversity and inclusion must go
beyond the bare minimum.”
The government is being lobbied to
force companies to disclose their
ethnicity pay gap, as they have done
over gender since 2017, as well as other
details about staff based on ethnicity.Zara Nanu believes
diversity must be a
long-term strategyBrent crude rose strongly in 2021 and was on track to end the year up about 51 per cent, or $26 a barrel, at more than $78
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