The increase in media and social awareness allows the customer to ask whether their tariff matches their needs…

As media and social awareness increases, energy prices are placed under the microscope resulting in customers actively asking brokers and suppliers alike if they are on the correct tariff, and if that tariff is the most competitive for their needs. This increased awareness has also resulted in clients looking at the way they purchase their energy, with clients now turning towards a more flexible way of purchasing which puts the emphasis more so on the broker or supplier to inform them about market fluctuations, changes within the industry and ultimately, at what state the market is in, and if they would be better or worse off if they purchased at that time.

Traditionally, energy contracts are acquired through one transaction, whereby the market rate at that time is taken; resulting in a p/kwh value for the specified duration that the client requires from 12 – 60 Months. However, with Flexible Purchasing your energy consumption can be broken down in a way that the customer can purchase different percentages at any time. These multiple purchasing decisions can be tailored to suit your needs from Monthly, Quarterly or Seasonal acquisitions or to clip sizes that enable you to maximise flexibility and facilitate any strategies you may have.


If we take a look at the above graph, which charts the course of Electricity (Front Month) prices since December 2015, with the right purchasing platform the client would be able to purchase their energy at a time where there is a dip in the market, allowing them to take advantage of the low commodity cost. By purchasing in this way, the client can look to reduce their Annual Spend, however, the market does not always go downwards and externalilties can heavily influence market direction in a matter of seconds; therefore if purchased incorrectly or not purchased at all, customers may see their spends increase.

That is where regular dialouge between the Customer, Broker and Supplier is key. If the customer is informed correctly and a platform of honesty and trust is created between all parties, clients can really see a difference to their energy spend. Flexible Purchasing is just that, there are various products available within that field that can place as much emphasis on the Broker/Supplier as you desire or put you, the customer, at the heart of any decisions. Triggers can be set, whereby once the market reaches a certain level a % of your yearly usage, energy can be brought or you can even pre-purchase a % of your yearly usage at a fixed rate and float the remainder until there is a dip in the market.


There are many more options available that can help you to reduce your spend, so to learn more please contact one of our experts………

Topics of Interest:

• Energy Industry Update P272
• Removal of CCL Exemptions
• GET your FREE Water Health Check

Our latest energy update providing insight into market trends
for gas, power & oil, and what to watch throughout the month.

Market Summary

Gas – During March, gas decreased slightly along with a slight increase between 15th-18th.
Power – Power offers have increased by £1.75 /mwh since the start of March.
Oil – Despite a brief slowdown mid-month, we have seen a sustained growth in prices.

Direction of Market Price (Annual Comparison)

After what was a terrible start to 2016 on the equities market, March saw a sustained rebound where the FTSE 100 climbed above 6,000 and eventually pushed its way to 6,200. Fears about the Brexit and reaction to the Budget did little to dampen what has been an interesting month for Markets.

Gas
Despite the increase in Oil prices, Gas prices overall have decreased slightly. Generally the UK system has been oversupplied due to slightly lower demand than seasonal norms, there was a one week exception where demand rose from 255 mm cm to around 300 mm cm; this spike in prices can be seen from 15/03 – 18/03 on the graph below. Another interesting development throughout March has been the volatility of the British Pound, which we can directly link to the daily volatility in the Gas Market.

Power
This volatility of the British Pound has had an adverse effect on the Power Market, more so than the Gas. This has resulted in some Power Curves being pulled, most notably GDF. Power offers have increased by £1.75 /mwh since the start of March, with a large spike recently – due to events in Brussels. The political implications of recent events are destined to have some effect on Currencies Markets but it has yet to be seen what direction the pound will take. Significantly, Demand is average for this time of year, however with the clocks going forward at the end of this week demand is due to decrease.

Oil
If we look at the Oil Market, despite a brief slowdown mid-month we have seen a sustained growth in prices, where finally the markets broke the $40 /bl threshold, in what is a very cautious market breaking that $40 /bl marker was huge. Interestingly, when we look deeper, fundamentals have not changed, there is increasing doubt over the state of the Chinese Economy and the Eurozone Economy, the US releases reports where one week prompts markets to rejoice and another week markets to ponder to worst and in addition to a US Presidential Race to contend with. The most notable influence on the Oil Market has been the move to bring out a ‘Production Freeze’ within Oil Producing Countries this production freeze would help to stop the continued oversupply of Oil into the Market. What is interesting is the fluctuations throughout a day’s trading, during February there were some violent swings, however trading throughout March was much calmer.

What to watch out for throughout April:

April will most certainly revolve around the potential meeting between OPEC nations during the middle of the Month, if Saudi Arabia and others can convince Iran to cut their production we could see Oil Prices break the $45 /bl thresehold or even $50 /bl. This will then filter through the Gas and Power Offers. Also, we must keep a close eye on Political and Economic announcements that in the coming months may change the landscape of not only the UK, but the Eurozone and the USA.

Topics of Interest:

• GET your FREE Water Health Check

• Energy Industry Update P272

• Removal of CCL Exemptions