Since our last Market Knowhow Report, Gas and Electricity Wholesale prices have decreased further and are comparable to the lows we saw in 2016.
Oil has fallen further to $27 a barrel whereas in January it was around $70. The coronavirus has reduced global demand. Russia did not agree with OPEC’s request to cut output, resulting in an increase from Saudi Arabia. The aim is to hurt both Russian and US production, ultimately forcing prices up and taking market share.
Gas prices have fallen with good supplies of LNG, again at around twenty deliveries for March. There is likely to be an increased demand from Asia with signs that they may have made progress in controlling the coronavirus. However, worsening positions elsewhere will see their demand reduced.
March is expected to see a fall in Wind’s generation contribution, but at 24%, this is still very high. Solar has also picked up at 4% compared to last month’s 2%.
The Met Office forecast is for colder weather with the potential for snow in some areas. This could add some pressure to Gas supplies and prices, in the short term.
Wholesale prices are extremely competitive. Although it is advisable to request supplier offers for all 2020 start contracts for your consideration, we are finding that some energy suppliers are focusing on their existing contracts due to resource issues.
Please contact us to look at options.
Head of Marketing