Short term contracts flat – Y report

Short term contracts are trading “relatively flat” this week, according to Inenco’s Y report. Dorian Lucas, Energy Analyst said: “Marginal premiums are at lows seen in August. Going forward we’ve mentioned we’re […]

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By Jacqueline Echevarria

Short term contracts are trading “relatively flat” this week, according to Inenco’s Y report.

Dorian Lucas, Energy Analyst said: “Marginal premiums are at lows seen in August. Going forward we’ve mentioned we’re expecting to see an increase in supply in the short term. On top of that, temperatures are expected to get back to or above seasonal norms so going forward we’re expecting potentially to see a downturn in prices.”

Seasonal contracts are a “little bit higher” than the lows seen in August, according to Mr Lucas.

He added: “However the downtrend is intact going forward and the next target for prices is that historic low that we saw in August.”

 

Customers set on a fixed price strategy should consider looking two or three years ahead.

Mr Lucas said: “Prices going forward across the forward seasons are kind of a minimum premium built into them as opposed to previous years when it would have been a lot higher premium. In some cases we’re actually seeing forward seasons add a discount to the ones closer to delivery which represents great value for those customers going for fixed prices.”

Customers placing flexible contracts with high levels of exposure should consider “a little bit because prices are pretty much at historic lows”.

He added: “Those who’ve got high quite hedges should again sit on their hands and wait to see if these prices can fall back below those historic low levels set in August.”