Good opportunity to place fixed price contracts – Y report

It is a good opportunity to place fixed price contracts, according to Inenco’s Y report. Dorian Lucas Energy Trader said: “If we look at the market in broad terms they […]

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By Jacqueline Echevarria

It is a good opportunity to place fixed price contracts, according to Inenco’s Y report.

Dorian Lucas Energy Trader said: “If we look at the market in broad terms they are still pretty much at contract lows. We are at a slight premium to them but in context to the last two years the market is still pretty much at the bottom. If you are looking to place fixed price contracts it’s a great time to do so and you will probably generate a year on year saving versus the last year.”

For customers looking to place flexible contracts it depends on their attitude to risk, according to Mr Lucas.

He added: “If you’ve got quite high hedges at the moment the current market conditions don’t represent a great opportunity for you to increase your hedges further.

 

“However if you’re quite lowly hedged there is a real argument to enter the market and increase your cover level just to mititgate some of the risk going forward.”

In the UK’s gas system, there is a lot of LNG coming to the UK which makes the system oversupplied.

However maintenance works are expected at the Langeled pipeline on the 19th of April which is estimated to reduce its capacity by 50% “which could cause some system tightness and mitigate some of the impact of increased LNG”, said Mr Lucas.