Wednesday 8 June 2016

Prices could continue to increase – Y report

Prices could continue to increase – Y report

Gas and power prices in the UK could continue to increase, according to Inenco's Y report.

That's because there is some maintenance works in both the Norwegian and UK continental shelves which have reduced flows to the country.

LNG flows to the nation have dropped as well due to maintenance works in Qatar.

Power prices could rise "potentially" as consumption of air conditioning increases due to higher temperatures.

Customers looking to place a fixed price contact should do it now, according to Energy Trader Dorian Lucas.

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He added: "We’ve potentially seen the bottom of the market back in January and prices will gradually ticked up from that point. The fact that we’ve recently breached April highs is a potential sign that prices could continue to increase over the short to medium term.

"The fact that prices are low over a number of years could potentially be a strong incentive for you when you place those contracts to place it over three, four, five year period providing you’ve got credit to do so."

Those customers with flexible contracts should consider their attitude to risk.

Mr Lucas added: "At the moment prices have moved up and potentially are going to continue to do over the short term so if you’ve got very little cover it might be worth increasing hedges and taking advantage of prices where they are.

"However the recommendation isn’t to close out all your volume because in Q3 this year we are expecting prices to potentially turn down again as we get a strong US LNG volume and demand is typically lower which might could see prices fall in the medium term."

Written by

Bruna Pinhoni

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