Gas and power prices are expected to rise a “little” this week, according to Inenco’s Y report.
That’s because supply demand fundamentals remain favourable in the short term, said Energy Analyst Dorian Lucas.
He added: “If you look at seasonal prices first they’re still pretty much at the bottom of the market there is a bit of fat built in based on the gains we saw last week but at the moment they’re pushing lower and we’re expecting to potentially see some fresh contract lows later in the week.
“If you look on short term contracts relatively close to delivery again, because we’ve seen much warmer temperatures forecast going forward demand is expected to fall a lot so in terms of how that’s going to affect prices we should see prices over the short term start to drop off a little bit and again push to set fresh contract lows.”
Customers who are looking to place fixed priced contracts “might benefit from waiting just a little bit in the short term”, Mr Lucas said.
Customers on flexible contracts with high levels of exposure should increase their hedges to mitigate their “risk going forward”.
He added: “However if you’ve already got quite a substantial volume traded there’s no real benefit taking any more at the moment because we are expecting potential losses over the short term.”