Energy Market Update
Now could be the right time to place your energy contracts, as prices remain low
Gas prices down 12% in April
• UK gas prices continued to fall in April following a significant drop in price in other fuels, particularly Oil.
• In addition, the UK has healthy storage supplies of gas. This combined with good wind generation reducing reliance on fossil fuels and lower demand during lockdown helped push gas prices to record lows.
Electricity prices fell by 1% in April
• Despite the lockdown and a significant drop in gas prices, UK wholesale electricity prices remained relatively stable falling by just 1% in April.
• EDF, announced a slow down to its nuclear production. This reduction means that more carbon intensive generation is needed, leading to an increase in demand for carbon certificates, resulting in a 14% increase in the cost of carbon over the month.
Things to watch out for
Weather:
Wind generation has been higher than expected supporting lower prices. This is expected to start reducing, affecting electricity prices across Europe.
Macroeconomic:
Coronavirus impacts on the economy are starting to show on economic data for Gross Domestic Product (GDP) and Purchasing Managers Index (PMIs). Fears of a global economic slowdown affected commodity prices, especially oil.