Energy Market Report for 17/02/12

There was very little movement in prices for electricity and gas week-ending 17 February 2012.  See below for details:

Main drivers

Upward drivers

• Lack of LNG arrivals
• Supply fears - Iran and Sudan

Downward drivers

• Milder weather
• Strong Norwegian gas flows
• European credit downgrade threats

Outlook

The outlook for prices remains uncertain at present. Continued concerns over Middle Eastern gas supply stability and a strongly recovering US economic position suggest that prices may rise, however the Chinese economy continues to falter, and warmer weather is now forecast which will tend to pull prices down.

Much will depend on how the markets interpret the deal agreed last night to address the Greek sovereign debt crisis. The short-term implications are favourable in avoiding an imminent default by the Greek government, with all the chaos that would have resulted, and this may give support to prices over that period

In the longer-term, however, the impact on the economies of the Eurozone members, and on their significant trading parties including the UK, is likely to be severe, with economic growth significantly affected for many years to come.

Furthermore, considerable doubts persist over the will and ability of the Greek government's to fulfill their obligations under the agreement, and this deal may therefore represent only a temporary reprieve.

The markets are therefore likely to remain volatile for some time, and clients are advised to watch market trends carefully in order to place contracts at the optimum time. 

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.