Uncertainty in gas and power price direction – Y report

There is a lack of certainty on whether gas and power prices would go back down or keep their uptrend. That’s according to Stuart Lea, Head of Energy Trading at Inenco […]

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By Jacqueline Echevarria

There is a lack of certainty on whether gas and power prices would go back down or keep their uptrend.

That’s according to Stuart Lea, Head of Energy Trading at Inenco who added: “If we look at the price trend, it is in a short term uptrend but if we look at the supply demand fundamentals they do suggest that prices could fall back down.

The reason for that are warmer temperatures which will reduce gas demand.

In terms of supply, the gas system has good stocks of LNG coming into the UK as well as healthy flows through Norwegian pipelines.

 

However there are maintenance works in Norwegian fields scheduled for late May and early June.

Mr Lea added: “However one fundamental to look out for is the oil price. It is in an uptrend and has just hit highs for the year at the start of this week.”

He believes it is still a good time to buy as prices “still represent really good value and are relatively close to historical lows”.

Mr Lea however warns businesses shouldn’t bank that prices would fall again.