Opportunity for fixed price contracts – Y report

Customers looking to place fixed price contracts are recommended to enter the gas and power markets as soon as possible. Dorian Lucas, Energy Trader at Inenco said: “This week might […]

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By Jacqueline Echevarria

Customers looking to place fixed price contracts are recommended to enter the gas and power markets as soon as possible.

Dorian Lucas, Energy Trader at Inenco said: “This week might represent an opportunity in terms of prices [which] moved quite a lot last week. We could expect a bit of a pull back this week which will give you the opportunity to secure a slightly lower price.”

On the other hand, customers looking to place flexible contracts should consider their current hedges.

 

Mr Lucas added: “If you have carrying a relatively low hedge I’d recommend you increase that to mitigate some of the risk going forward. However if you’ve got quite a high hedge already, this week might not necessarily represent an opportunity for you to increase those hedges. Again we don’t know what the fundamental outlook is  going to be at delivery.

“There are expectations that we are going to see much more US LNG and we could potentially therefore see prices out-turn cheaper at delivery but that’s by no means assured so at the moment I would err on the side of caution and carry a much heavier hedge into the winter season.”

He believes there’s a possibility for power prices to move up but gas prices may drop as Rough storage will be offline until August.