December 9, 2009 1:27 pm
Wholesale energy prices are now at their lowest levels since October 2007. Hence, now is the time to look at your next energy contract(s).
Even if your energy contracts are not due for renewal until next year, it is still worth putting a framework in place that allows you to make purchasing decisions now should prices move up.
As well as purchasing gas and electricity on a fixed or flexible basis, we also provide the following tailored services:
We are completely transparent on what we charge, so call our experienced, professional advisors for a FREE, NO OBLIGATION consultation on 0121 222 5617.
Market Overview – ELECTRICITY
With forecasters predicting a sharp drop in temperatures in the run-up to Christmas, short-term power prices have seen upward movement, which has also put pressure on forward periods.
In addition to forecasts of colder temperatures, forward prices have also been pushed higher by further gains in the price of EUAs (emissions allowances which generators factor into power costs) and a rebound in gas prices.
April Annual ‘10 prices are currently hovering around the £40/MWh mark, whilst October ‘10 Annual prices are steady around £42/MWh.
With supply margins looking comfortable for winter, Day Ahead prices look unlikely to fall below current levels of £32/MWh, with this figure reportedly being close to the marginal cost of generation.
Neither coal or oil prices are currently having much impact on the power market, with oil having dropped to a two-month low, falling below $70/barrel.
Note: information sourced via Spectron
Market Overview – GAS
After the warmest November in fifteen years saw prices on a downward spiral for much of the month, forecasts of a cold spell saw a sharp upturn in the market. Although gas prices are traditionally indexed to oil prices, recent weeks have seen gas being far less influenced by the oil market.
Increasing US gas (Henry Hub) prices, currently higher than the UK for Summer ‘10, have added upward pressure to the market in anticipation that the UK may be in competition for future LNG cargoes.
The increase in short-term prices, in anticipation of the drop in temperatures, has also impacted on the forward curve, which has also been affected by lower than expected imports from Norway. With Norwegian operators able to command higher prices on the continent than in the UK, imports have been diverted elsewhere.
April Annual ‘10 and October Annual ‘10 prices are currently trading around the 38p/therm and 44p/therm mark respectively. Note: information sourced via Spectron
What To Do Next?
For further information, just call our experienced, professional advisors for a FREE, NO OBLIGATION consultation on 0121 222 5622.
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