The wholesale prices of Brent crude oil, natural gas and electricity increased slightly over the weekend, but a small downward correction at the start of this week lent some confidence to short-term prices.  Despite the sub-zero temperatures now forecast for the rest of the week and possibly beyond, the average temperature for winter 2011-2012 is still fractionally above the seasonal average - with February also forecast to be above the average so the grid is expected to cope; and with imports from the UK-Zeebrugge interconnector increasing, supply should be more than sufficient despite a fall in LNG storage levels at the start of 2012.

Tensions across the Middle East continue as Iran, the US, and the UN fail to agree on Tehran's nuclear programme - claimed to be for energy purposes only - and threats to close the Strait of Hormuz, although still open for business at present to all seafaring traffic a lengthy disruption could result in an upward spike in oil prices.  Although confidence is high that no action will be taken by either side for the immediate future; the outlook remains uncertain. Forward markets are still steady and reflect some of the best future prices for years, but experience has taught us that even small global events can cause large ripples in the markets. Certainly the news that the UK is currently in debt to the tune of £1 trillion will do nothing to maintain market confidence.

In more positive news; prominent champions of green energy, Ecotricity, have snapped up the rights to add hydro electric generation to its already enviable portfolio of renewable-only energy, which is currently harnessed from Solar and Wind power.  Investing in newly pioneered technology - the 'Searaser' is a project able to generate some 500MW of renewable electricity, enough to power almost a quarter of a million homes. Using a simple technique of a pump-like device powered by the swell of the tide to deliver pressurised seawater to on-shore generators, the green light has been given to install some 200 units in the waters around the UK within five years. The costs of generation by Searasers are tiny when compared to complex off-shore generators, which are also prone to corrosion and costly to install.

The catalyst for this decision can be put down in part to the cutting of financial guarantees required by the Government from hydro energy developers by 80%, from £25m to £5m; creating a more realistic prospect for hydro installations to turn a profit. This massive reduction in fees is a welcome, but rather curious decision by the coalition, and is flying directly in the face of the huge cuts to FiTs (feed in tariffs) - currently being contested in the High Court - announced at the end of 2011.

We hope to be able to report more positive news regarding this exciting new incentive, and on a swift resolution to the Iranian conflict, but in the meantime, get in touch with by clicking here to find out how we can help you reduce bottom-line business energy costs - everything from procurement and invoice validation, right up to complex tenant billing and in-depth site surveys; you're sure to find our Utility Consultancy services invaluable, and extremely flexible.

The wholesale prices of electricity, Brent crude oil and natural gas have all held steady this week - following small ups and  downs, no major movement has been seen.

Despite threats between the US, the UN and Iran regarding nuclear testing and rights of passage through the Strait of Hormuz, thus far no impact has been seen in the markets and the Strait remains open for the time being.

Recent announcements that the UK is some £1 trillion in debt may cause ripple effects across all markets, including the energy markets - make sure you're up to date by subscribing to  our regular market updates and industry developments by clicking here.

Steadying prices this week is the news that capacity is currently exceeding demand in the UK, with coal-fired generation at the forefront of output and reaching almost 50% of total UK power generation following a long-term average of about 44% of total UK power, and news that the UK-France interconnector has been exporting this week for the first time this year following consistent imports. Although the cold weather is expected to continue for another ten days or so, outside temperatures have so far been slightly above the January average which points to a positive outlook.

Still just newspaper talk at the moment - as evidenced by no new revelations at the start of this week - the touted hostile closure of the Strait of Hormuz is still a hot topic. In the unlikely event of Iran carrying out the threat, and disrupting middle-Eastern deliveries - most notably from Qatar - not only would the exports of Brent crude oil be affected, but so too would the circa 77 million tonnes of liquefied natural gas (LNG) per annum which is transported through the Strait of Hormuz from Qatar to destinations worldwide. This equates to approximately 30% of the global LNG market.  Qatar is the majority provider of LNG to the UK - 85% of our imports during 2011 coming from there - and the UK was the biggest recipient of Qatari LNG in 2011, followed by Japan with 11.7 million tonnes (compared to the UK's 16 million tonnes).  Worth considering is that Japan is expected to increase imports to some 80 million tonnes in 2012 in order to  continue their economic recovery following the tsunami of last year and the loss of vast amounts of nuclear power (38% of total capacity).

Any temporary closure to the Strait isn't likely to have a massive impact on markets, as many traders and brokers of LNG believe the threats to close the chokepoint are empty, largely owing to Iran's economy which is heavily reliant on crude oil exports, and that the US Navy (at least) would intervene to ensure as little disruption as possible occurs, and the markets have acted according to these beliefs with prices holding steady and even following a long-term gradual slide in prices. Supply capacity across the UK is currently very healthy so no knee-jerk reactions in the markets are expected.

Clifford Talbot Partnership are of course constantly monitoring the markets for our Utility Bureau Service and Procurement clients and are advising on best steps when it comes to all aspects of Energy Management; everything from Bill Validation to Tenant Billing, as well as all procurement needs and dozens of additional services. Speak to our Utility Consultants and hear just how we can save you time and money when dealing with your utility needs.

The wholesale price of electricity has continued to fall following a trend started in August 2011, and we are now seeing the lowest wholesale price since October 2010. Meanwhile, natural gas and Brent crude oil prices have maintained their recent behaviour of an overall falling trend consisting of erratic lifts and downward spikes, largely driven by uncertainty in the Eurozone and political unrest in several key oil-producing countries.  The current cold outside weather has seen an increase in the demand of energy as people seek to keep warm, but the overall picture is very positive with supply being more than able to meet demand and the cold conditions, although expected to continue beyond the end of the week for the most of the UK, are not as severe as recent years.

The wholesale price of Brent crude oil has seen further increases over the past few days with intra-day prices fluctuating wildly and an overall increase during the festive period (19/12/11-03/01/12) of $7/barrel. The volatility of the daily markets cannot be ignored, but as it stands, there is still an ongoing downward trend and if recent behaviour is followed we could see a drop over the next week.

On the plus side, the US, China and India among others have noticeably increased oil demand as economic fears are lessened and production begins to climb again, but there are new fears over tension in the Middle East. Following a recent Iranian missile test and subsequent EU and US sanctions, Iran has threatened to close the Strait of Hormuz, which, like the Suez Canal is a major route for global oil exports - up to 20% (17m barrels per annum) of the world's total traded oil is exported this way and any blockage, even temporary, could lead to substantial increase in energy costs.

As a kind of silver lining to this cloud though, increases in oil costs may damage the global economy, resulting in reduced demand and leading to falling prices. Not an ideal situation in anyone's books, but the sort of see-saw effect that 'balances' the economy.

As always, we will be closely monitoring the markets and will be best advising our clients on future tenders as we look to secure best  prices through our energy procurement and utility management experts - contact us now if you're not already reaping the benefits of our expert Utility Consultants

A very happy 2012 to all - we at Clifford Talbot Partnership hope you had a pleasant festive break and are ready and raring to go in the New Year. As anticipated, the wholesale prices of all three major energy commodities held steady over the end of December, with prices being on a par with those coming into winter 2011-2012. While electricity wholesale prices have exceeded expectations by dropping further still - to a 14  month low - natural gas and Brent crude oil have seen slight upward movements, but remain faithful to recent market behaviour and are not totally unexpected increases.
 
Winter demand was easily covered this year owing to the mild weather and almost record high storage levels, but as businesses return to full operation following the Christmas break, we can expect to see an increase in demand and, although storage levels both current and  forecast are still excellent, a further upward movement is not out of the question, especially amid reports of rising oil prices which  may see knee-jerk reactions in markets.

At the time of writing, prices for April 2012 are at a 20-month low, and going as far as 2014, prices are still expected to be extremely keen, boosting confidence.

There is no doubt that 2011 was an eventful year, not least of all in the energy market, and the wholesale prices reacted accordingly, but not always in the way you might expect.

The start of February saw the Egyptian revolution with the then President Hosni Mubarak resigning after a peoples revolt which saw violence and demonstrations across the country. As a significant producer of oil, it was predicted that this would lead to an embargo on oil exports whilst a new government was put in place, and then; what if said government made wholesale changes to the entire oil export policy? It was these fears that saw a push on the market prices, rising by an average of 8% over the month.

Much like in Egypt, the Civil War in Libya during 2011 caused ripples in the market - although one of the top 20 major oil exporters, the duration of this unrest, culminating in the death of Muammar Gaddafi in October, covered almost the entire year, so the exact market effects are impossible to pin-point.

On the 11th March 2011, the Japanese Tsunami struck. This natural disaster cost more than 18,000 lives and destroyed over 200,000 homes. As well as the humanitarian disaster, the subsequent near meltdown of the Fukushima power plant raised global fears not only of the expelled radioactive material - something that is still ongoing with final repercussions not yet identified - but also the very fact that Japan was heavily reliant on nuclear power (almost 30% of total generation). As the country pulled nuclear power stations from the grid, they had to switch to other sources to meet (admittedly diminished) demand. The first port of call was Liquefied Natural Gas (LNG); with diversions being made from many countries to allow Japan to fulfil demand in a time of serious need. Naturally, the extra competition for this LNG caused prices to increase again, with a knee-jerk reaction increase of some 5% in the following fortnight. In reaction to the near meltdown of Fukushima, Germany pulled 20% of their nuclear fleet offline with immediate effect. This too added strain as their energy imports increased to cover this shortfall.

At the start of May the long-time number one Most Wanted Man, Osama Bin Laden, was killed following a US led storm in Pakistan. Again, further uncertainty followed with speculation that Pakistan had been harbouring Bin Laden, leading to stressed relationships across the globe. Although Pakistan itself is not a major producer of oil, political tensions often impact markets. In this case the impact was favourable, and the following fortnight saw a continued averaged drop of almost 8% in wholesale prices. A nice plateau followed, even during the atrocious rioting at the start of August in London, Birmingham, Liverpool and, to lesser extents, several other cities across the UK.

Several new electricity generators were announced during 2011, with energy coming from everything from bio-mass to nuclear, and a forecast mild winter added to confidence in the grid coping with demand during this period.

November saw the government make a U-turn on their policy to increase renewable power, by cutting the dividends paid for FiTs (Feed in Tariffs) by half and drastically reducing the incentive for domestic and commercial users to install solar panels to their properties, generating renewable power to be returned to the grid, and to fulfil their own power needs. Speculation arose that the Big Six energy suppliers may have had a hand in this cut, but who can say for sure...?

More recently, a new treaty has been agreed to take over from where the Kyoto Protocol leaves off in 2015 - the positive action should see changes in the entire industry as the UK look to move towards a low-carbon future, but as this is a long-term plan we don't expect any drastic market impacts for the time being. Shale gas generation also built up a head of speed this year, but is yet to be widely adopted in the UK owing to environmental concerns.

And all the while, we've had the Eurozone Crisis to deal with!

As a company, we at Clifford Talbot Partnership have enjoyed another busy year, solidifying existing long-term business relationships, and welcoming many new clients to our services with whom we hope to enjoy equally long relationships. The work we've carried out for our clients not only sees them reaping the rewards in time and money saved, but also helps re-establish our position as one of the leading Utility Consultants in the UK. This is a label we're very proud of, and in an effort to stay ahead of the game 2011 several new members of staff were appointed to our already highly qualified and experienced teams in order to offer the best possible service to our clients, both present and future.

As we anticipate another eventful, interesting and challenging year ahead in the energy markets, may we wish you all a very Merry Christmas and a Happy New Year.