If so, then we are 90% more likely to make savings for you against your current deal as statics are showing a 24 month low is expected to hold for the next few months.
Whether the market goes up or down from here we don’t know. A price secured now will crystalise your position and should there be marginal further relief you will see no benefit of this, but should the market start to rise from the lows we have seen the price that can be achieved today will increase. As the market is converged currently unlike 12 months ago there is no indication that waiting will provide any better price and politically there is potential for outfall from further action against the west in the energy markets.
Market Update:
The European and UK energy market has been working effectively throughout 2023, with the forecasts suggesting the current pricing will remain at this level for the next 3 years. In the gas market we are seeing a differential wholesale cost for 1 year and 3-year terms below 3%.
Amidst the Red Sea escalation after the US/ UK carried out airstrikes in Yemen, LNG rates have been impacted through the conflict as a number of cargo ships that would previously travel the Red Sea to deliver goods are taking the longer route around the Cape of Good Hope, adding up to around 14 days delivery time. The number of ships traversing the Red Sea has dropped by more than 50% since the first part of December.
The below link is a recently posted article around the expectations of the energy market going into winter 2023/2024.
The concern is that the market and supply is in a fragile state and any impact will send prices up quickly.
The key areas we are monitoring are:
1. Supply from USA and Norway, any distribution in these supplies by logistics or sabotage from Russia.
2. European nuclear reliance on uranium from Russia, we have seen Russia stop exports of Gas at their own economic cost and if they continued this with uranium it would cause a significant shortfall in European electric generation which would likely be picked up by burning gas.
3. Generation, wind and solar generation have been high across the UK and Europe year to date and it is impossible to forecast what this will look like in the latter half of the year.
4. Temperatures for winter 23/24, we enjoyed an above historic temperature this previous winter which relieved demand and cost.
5. The Israel/ Gaza/ Yemen conflict, the location of the conflict could lead to further disruption of the supply of LNG to Europe.
We are recommending our customers sign a minimum of a 24-month contract as the market is currently in a 24-month low.
To find out how Your Time Business Solutions can support your business with energy contracts and cost savings then send your enquiry to dean@yourtimebusinesssolutions.com