The price of Brent oil has been rising steadily but it rose to levels not seen since 2014 this week, sparking fresh concerns that power and gas prices will also rise higher. The rise in oil prices has added to a wider backdrop of bullish fundamentals in the energy market, from field outages and maintenance and the impact of high injection demands this summer with depleted storage levels across Europe following a long and cold winter to the wider fallout of Iranian sanctions.
Commenting on the spike in oil prices, Stuart Lea, head of energy trading at energy consultancy Inenco, said:
“While oil prices have been on the rise for some time, the decision to withdraw the US from the Iran nuclear deal has added to this bullish momentum, with oil prices now at $77.28 a barrel.
“This spike feeds straight into gas and electricity prices, and we have already seen them rise. Winter 2018 prices are currently trading in the region of 60.65 pptherm and £58.40/MW for electricity.
“We hedged our clients some time ago – advising them to secure their energy prices in advance. In a bullish market, where prices keep going up and up, it is risky to wait and see what happens, as it’s likely that energy will cost more. Our advice to businesses is to take action now before prices rise further.”
We’re already working with businesses to help manage the risk of rising prices – if you’d like to speak to one of our experts about what action to take and how to manage procurement in a rising market, please get in touch today on 08451 46 36 26 or email firstname.lastname@example.org.