- Auditel Consultant:
- Carl Windsor
Turbulence to come in the energy markets?
04 Mar 2010 | Filed under: BusinessA comment from Inenco in e:news
As the UK economy climbs very slowly out of recession, energy prices are bumping along at the bottom of market. Whilst this is good news for cash strapped businesses, there is a growing consensus that future price trends will be upwards. Once the global recovery gains pace then demand from the fast growing Asian economies will push gas and oil prices higher. In the UK, the tightness of supply, particularly in Electricity, can cause major price spikes very rapidly as it did in late 2008. So we can see that as demand picks up prices and volatility will both rise again increasing risks for businesses buying energy.
The obvious answer would seem to be to buy as much now, as far forward as possible but the obvious answer may not be the best. With the latest risk managed approaches to purchasing from the wholesale market, you can fix prices upfront but still have the flexibility to improve them as the market moves. Of course there is no guarantee of the getting the lowest price, but with traditional contracts you don’t have the opportunity to try.
