UK gas and power fundamentals are “favourable” this week, according to Inenco’s Y report.
Dorian Lucas, Energy Trader said: “We could see temperatures sustain at high levels and then obviously we’ll see demand decrease and potential for prices to come off a little bit.
“At the end of the week, temperatures are forecast to drop back to seasonal normal levels which could see a bit more demand and potentially hold any downward price action.”
Prices have come away from last week’s highs and are now “stuck in the middle range”.
Mr Lucas added: “Looking at price trends over seasonal prices we have seen a short term uptrend develop which obviously poses a risk to those customers who’ve got high levels of exposure on seasonal prices further out.
“I think it would be wrong to ignore the recent price action that we’ve seen and we’ve seen how quickly prices can change going from historic contract lows to a significant premium to those lows in the matter of a week.”
Customers who are looking to place a contract and don’t have any cover should increase their hedges “just to give themselves some price certainty and mitigate some of the risk going forward”.