Oil prices have had a staggering run in 2009. Oil prices have risen by 70% in dollar terms and 50% in sterling terms since the beginning of 2009. Reasons for this performance include expectations of a pick-up in demand as economies recover, OPEC production cuts, and a falling US dollar. The increase in the oil price has also coincided with a sharp increase in net long positions held by non-commercial interests (investors and speculators betting that the oil price will continue to rise). Continue reading →
Wholesale energy prices in the UK have taken another pounding in February driven by the onset of (slightly) warmer weather reducing demand for gas, and with more nuclear generating capacity coming back on stream. Continue reading →
Oil prices rose from just under $100/barrel at the start of 2008, to a peak of $147/barrel in July 2008, before crashing in spectacular style to sit at around the $40 level at year end. In dollar terms oil prices are down 60% on the year and have lost nearly ¾ of their peak value. Continue reading →
The sell off in wholesale gas and electricity markets has continued throughout November 2008. Over the last 2 months, wholesale gas prices have fallen by 33% with wholesale electricity prices down by 39%. This is still below the 47% fall in dollar oil prices since the end of September but the figures are now looking more comparable between the different fuels. Continue reading →
In our last energy update of 15 October 2008 we concluded that, although wholesale energy prices had come down from their highs, they had not come down sufficiently far to warrant a cut in gas bills and, at that time, wholesale power prices were still pointing towards and increase in electricity bills of around 10%, although this increase could be avoided if we managed to get through the coming winter without any major supply disruptions. Continue reading →
With banks and even whole economies collapsing, pensions getting decimated and depositors at risk of losing their savings in Icelandic banks, we thought we’d stay on the sidelines for a period, while the world grappled with more important issues. Continue reading →
In the past week, oil prices have pulled back sharply from a high of USD147 last Friday to USD132 today. Falling oil prices have had a predictable impact on wholesale gas and electricity prices, which have also come off sharply from the highs recorded on 4 July 2008. In the past 2 weeks wholesale gas prices have dropped by 9% with electricity prices off by 7%.
But is that enough to save the cash-strapped consumer from another energy bill hike? Continue reading →
In our previous update of 6 June 2008 we drew attention to the fact that wholesale gas and electricity prices had then reached yet another record high on the back of record oil prices.
We wrote …”To restore the balance between wholesale and retail prices, retail gas bills will need to rise by over 40% and retail electricity bills by over 20% in the next 12 months.”
That 40% figure seems to have caught the imagination and is now doing the rounds as the expected increase (according to unnamed industry sources). The main energy suppliers are even today being grilled by the Commons Select Committee over their pricing intentions for this winter. Continue reading →
The surge in global energy prices also spilled into wholesale gas and electricity prices in the UK. Forward wholesale gas prices increased by another 5.3% today (Friday 6th June) taking the increase since the beginning of the year to 76%.
According to our calculations wholesale gas prices are now higher than retail gas prices even before allowing for the substantial costs of transportation, metering and billing. To restore the balance between wholesale and retail prices, retail gas bills will need to rise by over 40% and retail electricity bills by over 20% in the next 12 months. Continue reading →