Energy Update for 12th September 2017
At the risk of sounding like a stuck record, I’m afraid prices went up again last week. We’re still seeing the ongoing problems with imports from Norway, due to outages on that side of the North Sea. Coupled with cooler temperatures, the fact that we were actually a net exporter of gas to Belgium, and a weak Pound and poor solar and wind output at the beginning of the week, all saw a positive push on prices. Fortunately, the wind situation picked up as the week progressed and also the Pound recovered, so keeping a bit of a lid on the price increases.
Another factor affecting prices further along the curve last week, has been an increase in coal and emissions costs. We’ve also seen an increase in crude oil prices, and that doesn’t always feel too thrilling to energy curves, as we know now. However, that’s not necessarily just been down to effects of the hurricanes over in the Gulf, in fact, demand in China and India have increased, and there have been some agreements in OPEC about keeping the caps on production in place, which have probably been more of a factor. In fact, the impact of the hurricanes on oil price is not as straight forward as one might think. It can effect, have a downward effect if demand for oil decreases as a result of these major catastrophic events. It can affect the ability for refineries to take on oil, therefore leaving a surplus out on ships in the ocean, or being produced in the wells.
One final point, if you’ve been following my LinkedIn profile, you may have seen a article that I wrote about water pricing. If you’re interested in participating in the water industry, now that it’s deregulated, you need to be aware that comparison of prices is not as straightforward as it is in energy, where you can look at the actual unit rates that a supplier is offering to you. Instead, prices are often presented as discounts or uplifts, and can be in percentages and pounds, making it very difficult to compare, particularly if the supplier has made different assumptions about the consumption that the customer is using, compared to other suppliers.
If you’re interested in tendering your water business and want a little bit of help, please don’t hesitate to contact me or any other member of Auditel.