Wholesale gas & electricity prices saw their largest fall in weeks on Tuesday which was overdue and most welcome. Of course that could change if geo-politicial factors come back to the fore but this correction is positive news.
Interestingly Winter period wholesale electricity prices for 2025 & 2026 are well below the current 2024 levels which is why longer term contracts of 24 & 36 months are being offered at a discount to 12 month deals. Whether to take the longer term deals is a different decision for each client as taking them gives you certainty, while not taking them gives you the flexibility to jump back in to the market as the prices drop.
As mentioned yesterday though the large increase from 30+p/kWh for electricity have passed and prices could drop another 3p/4p at retail but that will be the extent of it. The decision re contract length will depend on whether you want to capture & lock in price drops now or potentially save a bit more but have the uncertainty of not knowing as far forward as 2026 & 2027 now.
If you would like to discuss your individual situation please contact me on 07768 421 901, or do feel free to email me at this address.
| Gas: Gas prices fell yesterday as wind generation continued to output higher than average. European gas storage has reached 90% capacity, two and a half months earlier than the initial target. Whilst UK storage is currently at 79% capacity (85% capacity not including rough). Power: Power prices fell yesterday, tracking the Gas market. Wind generation has averaged 8.3GWs throughout August so far, 2.5GWs higher than the 2019-2023 average, according to the National Grid ESO. Oil: Oil prices continue to prove to be volatile but global demand concerns forced the market downwards. The IEA has revised China’s expected demand down by 100,000 barrels/day. European inflation rose to 2.6%, up from 2.5%, limiting any hopes of the ECB reducing interest rates and adding to further demand concerns. Carbon (EU ETS): The ICE Dec-24 closed slightly down at €73.07/t yesterday. This morning the contract is trading up again, currently at €73.63/t. Carbon (UKAs): The ICE Dec-24 closed upwards at £40.92/t yesterday. The contract has not yet traded at the time of writing. |
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