UK gas and power prices are expected to keep falling, according to Inenco’s Y report.
That’s because the market has decoupled from oil which is currently trading above $40/bbl.
Dorian Lucas, Energy Trader said: “Previously oil was dictating everything that gas and power did whereas now it relies more on the fundamentals. Going forward we’re expecting increased LNG and wider supply margins which is why prices are continuing to fall.”
It is a good opportunity to buy for customers on fixed price contracts.
Mr Lucas added: “However there’s scope for potential losses going forward so it’s down to your attitude to risk.
“If you want to wait you could achieve better prices but caveat that oil prices are still climbing and poses a risk to prices going forward that could see gas and power move upwards too.”
For customers looking to place flexible contracts with high hedges “there’s no real reason for you to increase hedges at current price levels”.
Mr Luas went on: “However if you’ve got really low hedges, the market’s just getting back to contract low levels and this could be an opportunity for you to increase hedges and mitigate risk going forward.”