Last week we saw prices increasing again slightly. Primarily driven by the gas system going short, despite the nice weather. Temperatures were quite cool, so demand increased a little bit and we also saw exports to Europe keeping the system in low supply.
On top of that we saw coal prices increasing, which also had a positive effect on prices and the pound was weak, which meant that European traders were buying gas.
Further along the curve, prices were supported by the increasing oil price, which has reached about $55 dollars a barrel and is approaching its 12 month high, which hit us around about the turn of the year.
Last week we saw the Syrian air strike have an impact on oil prices. Thankfully things seem to have calmed down since then.
However, there is no doubt that geopolitical uncertainty at this time is likely to contribute to volatility going forward. Anything that might impact the fundamentals of the production and delivery of oil on a global level is bound to have a positive impact on prices although of course if it impacts the global economic situation it might have a negative one.
Nevertheless, we need to keep a close eye on what’s happening in that space.
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