In a very similar pattern to the previous week, annual gas and power prices had hit fresh lows before finding support. While the UK is in the middle of a cold snap, lifting energy demand, this has not been the main factor behind the price moves. Part of the gains can be linked to stronger crude oil prices. Oil had fallen heavily in previous months, but there have been indications that the drop may have been too steep for some producers. There are suggestions that US investments in new oil production could be falling, limiting future supplies. Oil price volatility has increased as the market considers future supply prospects, as well as the influences of weak global economic growth on energy demand. Meanwhile, the UK’s electricity and gas supply systems have been coping well with the highest demand levels so far this winter. Even with an unplanned outage at Rough limiting storage send out, imports from Norway were stronger and LNG send out remained firm. Overall LNG supplies were aided by two additional cargoes being booked for January, bringing the total for January to seven. There has been some concern in recent days about Russia again, though, and its relationship with Ukraine. Russia has indicated it will end its discounted price agreement with Ukraine in April, and it continues to claim Kiev owes it money for previous deliveries. The dispute could lead to disruptions in flows to Ukraine, through which Europe receives the bulk of its Russian gas. However, the demand for the gas going forward may be mitigated by indications of a move towards warmer temperatures in the near-term.
With the current market levels at a near 4 year low we are recommending to all clients with a 2015/2016 electricity & gas contract renewal to go to market now for new pricing. Please contact Syntegra Energy Utilities: gl@syntegra-epc.co.uk or Giles Lawson on 08450 091 625 regarding our transparent Online Energy Reverse Auction Platform and we can assist you.
This document is for information purposes only. The information contained has been compiled from sources believed to be reliable. Whilst every effort has been made to ensure that the information is correct and the views are sounds, Syntegra Energy Utilities cannot be made liable for any loss no matter how it may arise.
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