Could the upward trend in energy prices be slowing?
The last two weeks have finally seen a shift from the steep uptrend seen in wholesale gas and power markets since early September. In the power markets, short term factors are continuing to weigh heavily on short term prices, principally due to on-going uncertainty over French Nuclear. This means power prices for the December 2016 – March 2017 period are significantly more expensive than the following winters.
I’m a small business: why should I care?
Wholesale prices impact business energy prices. And when wholesale prices go up, energy suppliers often increase their business rates. Comparing rates and locking in a fixed term deal is usually a good way to avoid the increases.
But right now, it’s probably not a good time to be on a variable rate business tariff and it’s probably not a good time to sign up to a new 1 year fixed price contract starting in the near future. Consider all options, including longer term deals.
If you’re out of contract or on a variable business rate click here to quickly see all the business energy options available at your premises.
What’s behind rising energy prices?
The consensus among commentators seems to be :
· The Nuclear Situation – Outages in French Nuclear sites continue. There’s a lack of clarity from the French about when this situation will resolve. Right now, this situation is having the largest impact on prices for the next 4-5 month, and forcing short term prices higher. Some positive news from EDF (or the regulator) about when these outages will end would most likely cause short term prices to ease.
· Cold Winter Outlook – Over the last few days we’ve seen weather forecasts suggesting that the UK may experience a colder than average winter this year. Whilst this should not have a large bearing for longer term contracts it will increase the prices of gas and electricity over the next few months.
· Falling Oil Prices – Over the last 2-3 weeks oil prices have eased. Over the last month, Brent has fallen from $54.00/barrel to close to $46.00/barrel. This is helping contribute to lower power and gas prices.
We’ll continue to keep an eye on these factors to see if the upward trend in prices is slowing.
*disclaimer: this short piece is intended to give an insight into power markets, rather than be tailored advice to everyone. If you’re not sure or want advice directly relevant to your situation, please get in touch with us at firstname.lastname@example.org