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Energy prices increase by over 12% in the last week

Apr 12, 2019

Lumina, we want to keep you up to date with any significant market updates that could affect your business. Our industry professionals have identified that market prices have significantly increased by over 12% over the last 7 days which we believe correspond to the following factors:

    • North Sea gas flows to North Western Europe have been heavily curtailed over the week. The Langeled pipeline gas flows were cut by 60mcm/d (around 1/5 of the UK’s daily consumption) last Friday for commercial reasons, while a number of unplanned outages are currently ongoing.
    • Carbon allowances have climbed to 10-year highs as the threat of a no-deal Brexit dissipates and the EU-ETS continue to restrict permits from the market.
    • Oil prices climbed over $70/barrel for the first time since November 2018 due to the ongoing conflict in Libya and improvements in US/Chinese trade tensions.
    • The release of positive Chinese economic data saw coal prices rebound from their lowest level since June 2017. 

The graph below shows the steep increase in Gas & Electricity Prices this week:

These factors have combined to create the most volatile period in market pricing since ‘The Beast from the East’ hit the UK in March 2017. Despite this, our predictions tell us that the recent increase in prices isn’t sustainable, and that this increase is likely a large correction in market prices after recent falls. The outlook appears to remain neutral/bearish moving forward.

To keep updated with energy market prices don’t forget to view our Quarterly Market Update newsletters.  Click here to read the latest edition.

For any further information please contact us on 0808 168 5688.