At the beginning of last week prices rallied a little as temperatures dropped and the gas system came back into balance after a period of being long. However, as forecast for April showed warmer weather, prices began to fall again, helped by a strengthening pound.
The wind generation fell off during the week. We began to see the impact of solar powered generation having a major effect on the draw from the main transmission system. It will be interesting to see how this affects the demand for air conditioned cooling, which should become current with the most generation of solar powered energy.
Looking forward with the exception of rumours that the Asian economy is beginning to recover, there seems little evidence to suggest a reason for why prices will rally in the near term. Oil prices are stranded around about $51 a barrel and have been for a little while and there’s a conflict between the increased output from the US still along with uncertainty over whether OPEC will continue to cap their production.
In the short term, we’re going to be moving away from heating load being a key driver of pricing volatility to air conditioning load. As I mentioned earlier in this report, it’ll be interesting to see the effect that solar powered generation will have on hopefully keeping costs down.
If you have any questions about this report, or anything else that’s going on in the energy industry, or anything that might help your business improve its efficiency and profitability then, please contact Auditel for a no obligation Strategic Cost Review