Happy New Year from all the team at Business Renewals
We wish you a safe and prosperous 2021
Electricity prices again traded with limited volatility during Q4 with the second lockdown impacting any meaningful recovery of near and medium term curves. As we moved towards the final few weeks of the year we saw prices reach their highest to finish the quarter around 10% higher than in September.
Given the uncertainties of both UK and global economies we would expect the New Year will likely bring further increases.
End point prices for electricity were as follows;
Oct 21 Annual – £51.97
Apr 22 Annual – £50.41
Oct 22 Annual – £49.46
Apr 23 Annual – £49.33
Through Q4 day-ahead and near curve gas prices remained within a tolerable range of 43p/therm and 33p/therm which was expected given the liquidity in the market and lower worldwide demand levels. However towards the end of the month Europe-bound LNG cargoes have begun to be rescheduled to Asia to meet a surge in demand as cold spells and constraints on coal imports have pushed LNG prices to a 2 year high.
As per our previous report demand levels are still to return to full pre-pandemic levels and as we move into the harshest part of Winter we would hedge on not seeing any major movements in wholesale costs. However, the uncertainties with COVID-19 will play a major part in prices for the near future, especially as the vaccine program is accelerated.
The message from Business Renewals is still buy and if possible buy your contracts as long as possible, we do not believe that the low prices being seen at present can or will last once World economies are fully restored.