Energy Update for 3rd April 2017
Last week saw prices increasing across the board for the first time in some time. In the short term, there was some volatility as the gas system fluctuated from between being a long and short, and also due to some fairly significant wind and solar output in the middle of the week.
However, strengthening oil and coal prices have helped support prices along the curve, and this is also resulted in a reversal from the position of backwardation that we’ve seen. Up until now, where the price of energy further out along the curve has actually been cheaper than the near curve.
The end of March also marks the end of the trading period for Q2 and Summer ’17 trading blocks. Suppliers perhaps, that have been short for those positions, will have been in a hurry to try and close them off before the end of the month, which could have supported the prices also.
Looking forward, we’ve finally left behind the winter period so, we’ll be concentrating on air conditioning load for short term volatility. Also, we’ll be watching those oil prices to see what they may have on the longer term.