Business Renewals

Wholesale Energy June 2021 Q2 End Point

Wholesale Prices

For the fourth consecutive quarter wholesale electricity prices increased, with Q2 recording increases of around 20% on the back of low UK gas storage and the ongoing battles with other Global economies for LNG deliveries as World economies start to climb back to pre-pandemic usage demands.  

Nearside October 21 contracts again saw the largest gains rising 40% and the feeling is that further increases will be seen in the market.

End point prices for electricity were as follows;

  • Oct 21 Annual – £57.55 now £80.93
  • Apr 22 Annual – £54.09 now £68.22
  • Oct 22 Annual – £51.81 now £62.27
  • Apr 23 Annual – £50.22 now £57.90

Gas markets have been slowly increasing over the last 12 months despite overall demand falling due to the pandemic but the last three months have seen the largest increases seen for some time with many contracts doubling in price.  The main drivers have been relatively low storage liquidity in both UK and EU markets and the continuing and competing pressures from Asia for LNG.  Injections into storage have started but if consumer demand returns in the summer months we could see prices squeezed even more.

  • Oct 21 Annual – 42.96p/therm now 87.11p/therm
  • Q4 Annual – 47.46p/therm now 86.31p/therm
  • Winter 21 – 49.54p/therm now 91.13p/therm
  • Summer 22 Annual – 38.62p/therm now 56.74p/therm

For those who follow our guidance Business Renewals have been clear in our recommendations to lock in (to a good deal) as soon as possible and this message is still applicable as we believe there is still a lot more potential for gas prices to continue their bull run, especially when you consider that the UK has very few LNG deliveries scheduled and faces fierce competition from both Asia and EU countries.

Strong recommendation to buy!

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