Tuesday 29 November 2016

Time to buy power and gas – Y report

Time to buy power and gas – Y report

Power and gas prices have traded higher from the beginning of the week, according to Inenco's Y report.

That is expected to continue as demand increases due to cold temperatures.

Dorian Lucas from the Optimisation Desk said: "Those higher day ahead prices have a knock-on impact on contracts close to delivery so December, January, February, March contracts they all are trading higher after having losses earlier last week."

He believes that change in the market is a "buying opportunity".

Customers looking to place a fixed price contract should look to enter the market to capitalise on the recent discount in prices.

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Mr Lucas added: "Again consider placing over two, three, four-year periods as prices are actually cheaper further away from delivery you go, specifically in the power market."

Customers looking to place flexible contracts should make their decision on their attitude to risk due to potential volatility in the market this winter.

Mr Lucas went on: "We’re seeing cold temperatures and a lot of fundamental changes in both gas and power markets as well as in crude oil, all of which could lead to volatile price action, so if you are away from risk you're probably better off taking a higher hedge throughout the remainder of winter, possibly into next summer."

Written by

Bruna Pinhoni

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