Interesting article below, very short spot market at the moment....

Interesting article below, very short spot market at the moment.

Come on STX, make it flow and they will come.

AGL : AGL caught short - AFR
AGL Energy's profit warning, after it was forced to source gas from the expensive spot market, is a reminder of the potential energy crisis facing east coast gas markets as buyers struggle with supply issues.
It also exposes AGL's vulnerability to even the smallest ripples in supply. The electricity provider, which earlier this year had the activists cheering as it pulled out of coal seam gas in New South Wales, is under pressure to find new sources of supply.
AGL's challenge is a reflection of the wider problems facing the industry as well as the thousands of east coast businesses that are more exposed to higher gas prices than residential consumers. Manufacturers in particular have been complaining about energy costs for years, threatening to close their doors if they cannot find a solution, but there is little happening at a policy level to fix the problem.
AGL shares fell more than 4 per cent before closing about 2 per cent lower after flagging a $100 million hit to its earnings next year because it was forced to buy more gas from the spot market in the first week of the new financial year in order to meet customer demand.
The spot market became a costly last resort for AGL because wholesale prices spiked just when it needed to buy gas. The move will have a $35 million negative impact on AGL's pre-tax wholesale gas margin in the first quarter of the 2017 financial year. While there were a number of one-off factors that combined to trigger the surge in demand, there is also no guarantee it will not happen again and put more pressure on AGL's margins.
This time round it was supply constraints in the gas market, partly due to increased demand at its Torrens power station in South Australia, and a safety issue with a gas supplier in Queensland that interrupted supply.
AGL is the largest wholesaler of gas in the country. It had previously set a target of sourcing 50 per cent of the gas required by its customers out of its own production but chief executive Andrew Vesey put the upstream gas business under review after moving into the top job last February. The company has major gas contracts rolling off towards the back end of calendar 2017.
The problem for AGL and other energy companies is that the market has not yet adjusted to years of oversupply to the current situation where a surge in demand has stretched resources to the limit. AGL is investing money in gas storage to try to build contingency into its portfolio.
A key meeting of federal and state energy ministers scheduled in Darwin next week was put off until the outcome of Saturday's vote became clearer. If the Coalition wins government as expected, there will still be key holes to fill in the cabinet, which means there is no guarantee federal Energy Minister Josh Frydenberg will remain in the portfolio.
The meeting will be important as the industry seeks to address confusion around different renewable energy policies and soaring wholesale electricity prices. An energy crisis in Tasmania after the Basslink transmission cable to Victoria was damaged, highlights how little it takes to trigger a jump in prices because the market is so tight.
The Australian Competition and Consumer Commission released a report in April that backed up their complaints. ACCC chairman Rod Sims is worried about the control pipeline owners have on the market and lack of choice in supply sources.
Australia, which has seven massive LNG projects, is expected to become the world's biggest exporter by 2018. But this has so far only driven up gas prices for local users, who want domestic reserves set aside.