Business Renewals

Wholesale Energy Mar 2021 Q1 End Point

Wholesale Prices

Power prices continued their gains through the first quarter of 2021 with all forward contracts seeing increases, in the main the trend followed the day-ahead gas prices which saw some significant short term increases in the middle of January.  The biggest gains were seen in the last few weeks of the quarter which we believe could signal a longer bullish wholesale trend.

October 21 contracts saw the largest gains over the last 3 months, rising around 11%, a trend that could continue well into the Spring.

End point prices for electricity were as follows;

  • Oct 21 Annual – £57.55
  • Apr 22 Annual – £54.09
  • Oct 22 Annual – £51.81
  • Apr 23 Annual – £50.22

The year started off with plenty of movement in the gas markets, unfortunately the movement was upwards with Asia again bidding heavily for LNG deliveries but as seasonal temperatures were revised to above normal the longevity of any market rally was short lived.  The rest of the month again remained flat with little gains or losses overall.

The outlook remains uncertain with EU storage at respectable levels and LNG deliveries available but rising oil prices with Brent now at $65 (62% increase since October could provide a boost in underpinning a stronger market into Q2.

  • Oct 21 Annual – 42.96p/therm
  • Q4 Annual – 47.46p/therm
  • Winter 21 – 49.54p/therm
  • Summer 22 Annual – 38.62p/therm

The message from Business Renewals is a strong recommendation to buy as we believe that the overall trend is for a bull market even with summer as gas prices are likely to start responding to the large increases seen in the Oil markets and Global demand is likely to increase significantly over the next 6 months.

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