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28 Feb 2017 | Filed under: Energy Updates | Tagged:

Energy Update for 28th February 2017

Auditel’s Energy Pricing Report, covers the period from the 13th of February through to today, the 27th. Energy prices over the last fortnight have been particularly influenced by weather and warmer temperatures. Last week warmer temperatures in the very short term helped keep prices down along with high wind output. This week we will have all seen storm Doris working its havoc, but that also contributed to strong generation from wind and reports of a warmer than average March have helped keep prices down. Over the whole two weeks prices have dropped.

Interestingly, the decrease in prices has been more muted further out on the curve, resulting in a narrowing of the gap between longer-term and shorter-term contracts. This seems to be due to confidence that oil caps will be maintained and the oil prices will increase over the longer term and coal prices have also increased recently. However, in the event that the oil price does go up, this will give greater confidence to the shale oil industry who are likely to increase their output, which in its turn will end up reducing prices.

Looking forward, we might expect temperature forecast to have less of an impact as we leave the winter period where heating load is so important, particularly on gas prices, and of course concerns about Brexit and its impact on currency rates is always going to have an effect. Almost certainly we’ll have to keep our eye on those oil prices, which could go in any direction.

If you are interested in finding out more, please contact Auditel for a no obligation Strategic Cost Review

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