Our energy market update gives you insight into market trends for gas and power, and what to watch throughout the month.
Gas – A stable month with prices continuing to drop due to Oil
Power – Relatively stable movement which followed the gas market
Direction of Market Price
Prices continue to fall across December and January in line with the plummeting oil market. Brent crude fell to a five year low on the back of global oversupply.
The drop in price prompted many key financial organisations to reduce their 2015 oil price forecast, this suggests that a strong recovery in the oil price is not expected for the next 12 months at least.
Additional gas price reduction was due to a healthy gas system where demand was generally at or below the seasonal average and the gas supply system remained positive.
Power prices also seen strong losses across December and January driven by reductions seen in oil and gas markets as well as wider commodities such as coal and carbon providing further strength to any reductions.
Extremely strong renewable output from wind generation throughout December adding strength to the renewable supply source accounting for approximately 15% of the UK’s generation.
Similar to the gas market, power losses were strengthened by low demands seen throughout the UK due to lower than seasonal norm temperatures and demand through December & January.
Our recommendation, based upon the current price decrease in commodity costs would be to obtain prices for all contract start dates in 2015. Upon receiving prices we would recommend securing agreements for 2-3years based upon current market costs in-line with a bespoke procurement product such as Price Shield.
Price Shield protects you from rising energy costs but also allows you to take advantage in dips in the wholesale market.
To Find out more information, have a look at our website – https://www.getsolutions.co.uk/energy-plus/price-shield/