The Advice
Energy buyers should wait as long as they can before locking away their fixed price contracts or take advantage of daily spot prices, according to a monthly price risk prediction from BuyEnergyOnline, the online energy market for businesses buying electricity and gas.
Globe watch: need-to-know background
Confusion reigned in Europe last week due to an unexpected agreement by Eurozone leaders on a plan to centralise funding of the banking debt crisis in return for banking union, while across the Atlantic in the US, the world growth engine struggles with economic growth, confidence, employment growth, retail sales, property prices and debt levels. China growth is also slowing.
Bulls are pinning their hopes on another round of monetary stimulus by central banks. Although the head of US Federal Reserve Bernanke “dashed hopes” last week with his moderate US monetary stimulus, hopes are high for more “aggression” next time round. BuyEnergyOnline noted that in the past monetary stimulus has been a “bullish driver of energy and financial markets”.
In Asia, Japan is firing up two of its nuclear reactors as a first step towards their aim of bringing many more online, while in the Middle East, Saudi increased its oil supplies and stated they want oil prices below $100/barrel to support the weak global economy.
What happened with energy prices?
These global developments and uncertainties resulted in volatile energy prices during June, said Derek Myers, the head of BuyEnergyOnline: “UK energy prices continued their downward trend during June until Friday’s Eurozone plan resulted in prices bouncing back into positive territory on the last day of the trading month.”
Mr Myers added: “The net result for June was a 0.4% gain for gas prices to 2.10p/kWh and a 1.6% rise in electricity prices to 5.26p/kWh.”
The Prediction
Despite the bounce at the end of June, BuyEnergyOnline advise that energy prices are likely to resume their downward trend .
Mr Myers said: “We believe UK energy prices will continue trending lower over the next several months as the Eurozone crisis drags on, global economic growth continues to decelerate and Japan turns their nuclear generators back on. Aggressive monetary policy actions by central banks is the main upside risk driver which may support prices.”
Notes:
Note that these views and recommendations are offered for your consideration, but may be wrong as the market is highly uncertain. The energy markets hold additional risks which are unknown until they arise.
Visit www.buyenergyonline.com to view the full Report or contact Mike Chan on mike.chan@buyenergyonline.com or 07769972189 for any questions?
July 5th, 2012 at 7:41 am
Where can one purchase electricity at 8 pence a unit here in the UK. Why
aren’t the big six energy giants, with massive profits, much of which is
made by carefully “overestimating consumption”, in order to ensure accounts
remain in credit, allowing them to tap into “interest free credit” together
with overinflated energy tariffs, to the disadvantage of the customer. There
are over 400 tariffs in operation, far too many for the consumer to understand or benefit from. One of my other issues with energy supply is that deregulation of the market, has had very little of no effect on prices to the consumer. The Which Report confirms this fact
Prices have remained high despite the wholesale prices for energy have fallen, the savings are not being passed onto the customer, but go to swell
the profits of the Big 6 energy companies. An example is case, EDF Energy,
who spend a small fortune on advertising on TV (British Gas also), has published profitsin 2011 of 2.5 Billion pounds and looks set to break that
record this year, to 2.7 Billion, estimated. Shame on you!
Unfortunately, they do not care, as illustrates their ” Customer Satisfaction Rating” of only 40%! This says it all in my view.
July 6th, 2012 at 9:12 am
The electricity price that you pay will be made up of a number of elements which are not shown in the ‘raw’ data – if you are a large user you will be able to buy the actual energy at this sort of price but not use it until you ‘employ’ the network and meter operators, pay CCL etc.
I feel that the energy companies get a lot of unfair bad press over their margins. In reality these are not much more than commercial levels that most businesses work to. I do feel that there are still operational efficiencies to come out of the industry however – both in terms of customer service and back-office type costs/efficiencies.Overall I get much more emotional over petrol/diesel pricing/taxes/margins and I think that the domestic energy suppliers are getting flak from consumers related to that as much as anything – which suits the government pulling in the taxes…….