Tritility Energy News 27/11/19
Welcome to the first edition of Tritility Energy News.
Tritility Energy News is our brand new fortnightly report. An insight to all the latest news and trends in the energy industry and how this affects energy prices for your business, plus our future predictions.
• November has reintroduced us to sub-zero temperatures. Unsurprisingly this caused an increase in prices for both gas and power.
• Forecasts show that daytime average temperatures are set to fluctuate over the next two weeks.
• Suggestions of a resolution between the US and China’s ongoing trade disputes could ease tensions in the gas industry.
A rise in demand for gas as the colder weather moves in comes as no shock, bringing with it a rise in prices. Wholesale gas prices are predicted to increase by 2% as we move into December and will continue to increase into 2020. January sees another increase of a further 4% which was expected.
From the forecast, gas prices are not predicted to fall substantially until Summer 2020. Even then, with demand decreasing drastically compared to the winter months, prices are not expected to return to the current price levels. Unfortunately, these figures support other evidence showing that energy prices as a whole will continue to increase year on year.
Over the next 14 days, temperatures are predicted to fluctuate. Warmer weather can be expected for the rest of this week, however, is short-lived. At the beginning of December brings a temperature drop well below average, causing a rise in gas prices.
Prices are expected to stabilise into mid-December at the new higher cost despite temperatures increasing to match the predicted average.
Power and Wider Fuels Summary
The UK power supply displayed an increase in price mid-November due to demand rising in the colder weather. We can expect this to increase again as colder temperatures are forecasted from Friday onwards. Currently, power wholesale prices are predicted to increase by 4% into December, with a further 5% increase in January.
In Mid-November, the global oil benchmark suggested a resolution between the US and China regarding their ongoing trade dispute could happen. Today there is growing optimism that a deal is possible between the two. However, it is more likely that China will wait until after the 2020 elections before trying to secure a deal.
There has been a growing concern over the effect this trade war will have on the global economy. Although the slowing growth rate for China does not cause too much concern currently, this unresolved dispute could have a cooling effect on the global economy. In particular, oil prices could be at risk of significant increases throughout 2020.
While reasonable measures are taken to ensure the information above is from reliable sources, we can not guarantee complete accuracy. Views expressed are solely those of the author, not Tritility, and are subject to change without notice.