This months energy report below highlights market movements and the latest energy news, mainly surrounding the surging gas prices. For hospitality businesses who are coming to the end of their energy contract in the next few months, we recommend reviewing your options during this difficult and uncertain period.
Gas prices hit a new record earlier this month and peaked at over six times the pre-2021 record. The intraday volatility was unprecedented, and the session’s prices surpassed the highest price ever paid for a wholesale product outside of network balancing actions.
This pricing report will focus on the energy element of a bill to help you keep track and understand the wholesale energy market and the factors affecting the price of your contracts.
Concerns remain over potential disruption to Russian gas deliveries to Europe amid historically low storage stocks. There was no impact on Russian gas flows via Ukraine to Europe so far, but day-to-day uncertainties led to panic.
President Biden has targeted the main sector of Russia’s economy and has signed an executive order to ban the import of Russian oil, gas and coal to the US. The UK Government has also announced its plan to phase out oil imports from Russia by the end of 2022 instead of immediately, to give the market, businesses and supply chains “more than enough time” to replace Russian imports, which make up 8% of UK demand.
Market analysts say there is no sign of downward pressure on prices for the next few years and prices are heavily dependent on how the conflict between Ukraine and Russia develops. If you are sitting on out of contract rates, unaware that business energy prices are not regulated in the same way as domestic, then you could end up paying up to 500% more for your energy than you need to.
Energy report kindly provided by www.fidelity-energy.co.uk