Utilities Market Knowhow!
The Year Ahead Wholesale Gas and Electricity prices continue to fall, although the pace of the price decline has slowed in the last month.
A significant reason for the reductions has been the continued fall in the Oil price which reached a six year low in November and still remains in the region of $45 per barrel, which is 40% lower than at the same time last year.
OPEC have so far refused to curb production and with Iran looking to increase output and US Shale Oil remaining healthy, there is little sign of any significant upward movement.
China’s need for Coal imports has reduced significantly, down 31% so far this year and with India increasing production 8% over the same period, Coal is even less likely to see a recovery in the short term. Although the UK and US are looking to decrease the use of Coal for energy generation, other emerging economies will rely on this to meet their growing demands
What does this mean to me?
The Year Ahead Wholesale Price Reports show further reductions for both Gas and Electricity.
lpm recommend that customers at least look at contracting now, as these low prices are thought to be nearing the bottom end of what the industry can tolerate without further generation or production going offline, due to the economics of supply.
lpm, together with our utilities broker Indigo Swan, would be happy to research development communal supply options for 12, 24 and 36 month contracts, to determine the potential benefits these current low prices might mean for you.
To find out more about how these current low energy prices can benefit you, please contact your lpm Estates Manager now.
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