Although reports have suggested rises in wholesale market prices over the past fortnight the actual increase is minimal; only about 3% between the lowest and highest point of the last 14 days.

As is always the case with the energy markets, there are many factors to take into account when analysing the reasons behind market behaviour. The beginning of 2010 has seen an almost unprecedented cold-spell which has, as expected, impacted the market.  As a result of the unusual weather several power stations were forced to shutdown for unplanned maintenance which, when coupled with the increase in both gas and electricity demand as end-users switched on heating and stayed at home watching television, did result in a small spike. But certainly not on the level predicted by some commentators or indeed media outlets and politicians, some of whom claimed the UK had ‘only 8 days supply remaining’ - a rather crude attempt as scaremongering if ever there was one (and one which will no doubt be recycled to sell tabloids come next winter).

Of course, events across the world can have huge impacts on energy prices here in the UK - most clearly evidenced during periods of tension between, for instance, Russia and the Ukraine, or unrest in the Middle East. But also more recently amid reports of a  potential power shortage in China which resulted in increases to worldwide prices as panic buying ensued.

As the weather begins to warm up and the evenings become lighter, demand won’t be as high which will increase stored capacity; potentially leading to a slight ‘downward correction’ in market prices. Of course, any incident worldwide, could counteract this drop and result in no movement at all, or even a slight increase.

All the reasons above highlight the importance of monitoring the energy markets; something we do on your behalf using the wealth of information and experience at our disposal in order to best negotiate your utilities contracts and achieve the best possible deal for you.

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