Tuesday 24 January 2017

Colder temperatures affecting demand – Y Report

Colder temperatures affecting demand – Y Report

Below seasonal temperatures are having an effect on demand this week.

This is compounded by ongoing issues with Rough Storage, according to Inenco's Y Report.

Ongoing pound and euro volatility, as well as the Supreme Court's decision to take the Brexit vote to Parliament, has also been an important driver in the energy market.

The low temperatures currently being experienced in the UK are having an effect on the prompt market, with gas and power day-ahead prices reaching two year highs.

[youtube url="https://www.youtube.com/watch?v=xTSUk2wxmxc" width="575" height="323"]

The cold weather is also having an influence on seasonal prices further out on the curve, which are currently trading at close to 18-month highs.

Energy Trader Sam Sinclair said: "In terms of fixed-price contracts, we are in an uptrend at the moment but we are getting towards the end of the winter period, when we could see prices come off a little bit. However, that's not without risk because prices could continue to rise.

"In terms of flexible contracts, there is sideward movement in the market at the moment. We would be advising our clients to increase their hedge levels, with a view to perhaps unlocking towards the end of the winter if we do see a dip in prices."

Written by

Bruna Pinhoni

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