Gas and power demand down – Y Report

Warmer weather in the short term is dampening demand for gas and power. The arrival of Storm Angus and its strong speeds have seen wind generation increase and power margins […]

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By Jonny Bairstow

Warmer weather in the short term is dampening demand for gas and power.

The arrival of Storm Angus and its strong speeds have seen wind generation increase and power margins widen, according to Inenco’s Y report.

This has lessened the demand for gas-fired generation, making the system more comfortable.

Oil prices have picked up over last few weeks as OPEC seems to be welcoming Iran back into the fold, states Energy Trader Dorian Lucas.

Increased temperatures and wind speeds at the start of the week mean day-ahead gas and power prices have gone down.

 

Mr Lucas adds: “Customers looking to place fixed price contracts should treat this recent downturn in prices as an opportunity to get into the market place and get those contracts fixed. In terms of duration, we’ve spoken about this quite a lot in recent weeks, it comes a lot down to your attitude to risk.

“If you look at the current market and see good value versus previous years, I’d recommend fixing over a longer period of time.”

He went on: “In terms of flexible contracts, again this recent downturn in prices, we’re treating it more as a buying opportunity, so if you’re looking at your hedge levels and you’ve still got quite a lot of exposure and you’re not happy with that moving into the riskier time of the year, treat this as an opportunity to increase that hedge and mitigate some of that risk.”