Energy Market Report for 27/01/12

Prices for electricity and gas showed little movement throughout week-ending 27 January 2012. However, on Friday, revised forecasts were issued which showed significantly lower temperature forecasts for February and perhaps beyond, and this resulted in a chaotic day on the markets, with both gas and electricity prices rising very sharply throughout the day.

Main drivers

• Forecasts of colder weather
• A comfortable power system
• Anticipated LNG deliveries
• High gas storage levels.

Outlook

• As far as future price trends are concerned, much will depend on how the system copes with this expected increase in demand
• With the cold snap now upon us, and with it expected be both prolonged and to affect not only the UK, but significant parts of continental Europe, there is a potential for prices to continue to climb steeply, and early indications this week are that this is the case
• However, if the system proves to be coping adequately with this situation, we may see a downward adjustment in due course as the market corrects what may prove to be an over-reaction.

Clients are therefore advised to continue to monitor the situation carefully, and to be ready to take advantage quickly of any reductions in price that may occur.

If you have any queries about energy procurement or wish to know how the current energy prices may affect your business, please contact us on 029 2002 2888 or email info@uesenergy.co.uk.