2601-oil prices-crude oil

Document Sample
2601-oil prices-crude oil Powered By Docstoc
					Tough financial forces and bad summer weather
appear to be determined to try and take charge
of the wholesale power supply market.
Prices tumbled throughout the middle of June to unique lows. Annual gas prices are today 15%
lower than the same time last year, whilst annual energy costs fell to a two-year low plus are
22% down year-on-year.

Falling energy prices dragged yearly spark spreads down 7% to £3.4/MWh, plus even
which reliable stalwart coal is having a hard time of points, with slipping prices buffering the fall
of dark spreads somewhat to a £17.9/MWh premium to spark spreads.

So what's been setting off these cost crashes? Well, concerns regarding debt in the Eurozone
countries hasn't helped. Greece lurches from crisis to crisis plus even the election of a new
government is doing small to allay worries about its long-term future. However it's slowing
financial growth inside the US and China which has actually forced global vitality markets
downwards. Brent Ameratex Crude Oil tumbled to $97.6/bl, its lowest level because January
2011, plus yearly API coal dropped to a hot 20-month low of $95.4/t.

But, all of the is advantageous news for customers. While we will be missing out on which 'BBQ
summer' the forecasters guaranteed you, both domestic and commercial end-users have seen
power prices drop in real terms. A fall inside inflation has furthermore aided to stabilise the retail
market, yet the big difference has been at the pumps, where motorists have finally started to
see the numbers found on the forecourts going down instead of up. This, combined with lower
electricity plus gas bills, has provided the British economy a brief respite, during that it has a
chance to drive up creation and keep the fragile heart of UK PLC beating for a while longer.

Ironically, it's been the biomass marketplace that has held the fort. Despite biomass contracts
dropping, with prices for 2013 down 1% to £88.5/t, costs are nonetheless around 6%
higher than this time last year. They've recovered from their four-year low plus are at their
highest level for five months. This boost has been helped in no little measure with all the
approval of the plans for a 40MW staw-fuelled biomass plant inside Snetterton, Norfolk, that
have finally been provided the go-ahead.

The real headline grabber throughout June and into July has been the atrocious weather the UK
has experienced. Lower than average June temperatures plus storm following storm has
resulted in a rise in UK gas demand. Supply peaked at 223.1mcm on 11th June, in the center of
the bad weather. Industry watchers believe which the unseasonably bad weather has
encouraged countless persons to do anything they wouldn't usually do inside June - they turned
the heating up. The outcome was which though the national system decreased 0.1%, the
territorial program climbed 2.2%. To date, summer demand (calculated from April 1st) was down
7.8% on the national program however up a staggering 31.1% found on the regional program,
compared to the same time last year.
What this indicates is the fact that while gas demand for energy generation is down year-on-
year, consumption by households and little companies has risen. This signifies that gas
expenditure is acting because a barometer for the productiveness of the UK economy and whilst
the big consumers can be trying, homes plus businesses are continuing to ride out the worst of
the financial storm, putting a more positive face on what has been a difficult few months.

How costs might fare inside the upcoming few weeks depends 3 things - the resolution (or
otherwise) of the Eurozone crisis, and the financial condition of the US and China. If they
commence to wobble we can see prices start to climb back up again.

Shared By: