Customers who are looking to place fixed price contracts should do it now, according to Inenco’s Y report.
Energy Analyst Dorian Lucas said: “You’ll gain a bottom of the market price as well as you need to think about where this October deadline is. You need to make sure you’re placing your business in the last week of August and the first few weeks of September.”
Flexible contracts with high hedges should wait to see how low the prices go, he added.
The UK gas system is oversupplied this week as it received a lot of gas “in excess of what it would normally get”.
Mr Lucas said: “We’ve had a lot of LNG over the recent weeks, that’s continued again this week. We’ve got two cargoes booked in to arrive later this week and that’s going to potentially see the system maintain that oversupplied state.”
Looking at oil, he added: “WTI and Brent, which are the two key benchmark prices for oil, both traded at fresh six and a half year lows and that’s a result of continued oversupply with Iran potentially looking at increasing production as well as faltering demand as Asian economies continue to waver and struggle.”