UK gas prices fell significantly during October. Gas prices declined 16.5% to 4.92 p/kWh, while Electricity prices posted similar losses of 15.7% to 13.98 p/kWh. At the heart of the energy price crash have been further signs that Russia will increase exports to the EU after previously restricting supplies for months. Russia’s state-run gas exporter Gazprom said it had hit its target for filling domestic storage two days after President Vladimir Putin ordered the company to start filling its European storage facilities.
In the UK’s Autumn Budget, Chancellor Rishi Sunak has announced a range of funding measures aiming to increase decarbonisation in the UK’s power sector. Sunak made the speech ahead of the upcoming COP26 conference. The budget continued the environmental theme in places, promising a £30bn fund for green infrastructure investment.
Carbon recorded a 4.8% drop in European prices to €58.71/tCO2, as encourging gas signals and higher wind output have reduced the demand for coal-fired generation. Brent crude oil prices moved 7.4% higher to $84.32/bbl, extending gains to multi-year highs, bolstered by worries about coal and gas shortages in China, India and Europea, which spurred fuel-switching to diesel and fuel oil for power.
With prices falling, clients may wish to see if the trend continues and hope that they can purchase their energy once markets have fallen. However, customers renewing between now and 1 April 2022 will still be open to winter price volatility due to demand uncertainty and Russia’s influence over supply.
Customers renewing in summer or winter 2022 may prefer to wait, ride out the winter volatility and hope that European temperatures don’t drop below seasonal norms for too long.
Disclaimer: These views and recommendations are offered for your consideration and Beond makes every effort to ensure that the data and information in this report is accurate. However, due to the volatile and unpredictable nature of the energy markets, Beond cannot guarantee the accuracy of both the information and the recommendations provided. Beond does not accept any responsibility for errors or misstatements, or for any direct, indirect, consequential or other loss arising from any use of this information and/or further communication in relation to this information.