Well, we have reached the latest precipice in the apparently never-ending Brexit saga; at the time of writing, the EU Council are about to meet to discuss and decide upon the next steps on the latest Brexit deal. The pound is currently trading higher versus both the Euro and the Dollar amid positive signs coming from the EU that a deal proposed by the UK could be approved before the Halloween deadline, but haven’t we all heard this before!
The last week has seen marginal increases in short and long term gas prices but there has been no significant changes to the fundamentals with both UK and Continental gas storage remaining comfortable with several LNG tankers expected to hit European and UK shores over the next 4 weeks or so but there are still lingering, persistent fears surrounding demand should the harsh Winter that has been forecasted arrive.
As a result of the higher gas prices, Power pricing followed suit, strengthening over the past few weeks and following yet another attack on a Saudi Oil Tanker in the Middle East, Oil prices also posted weekly gains to move back above the $60 a barrel mark.
All these factors are not aiding the energy markets as we move into the cooler, higher demand Winter period which brings a natural seasonal increase in rates as demand traditionally out ways supply.
However, the real test to the markets will be whether the UK and the EU manage to agree a deal by the 31st of October deadline or the more likely outcome that an extension to article 50 is requested or indeed the UK leaves the EU without a deal. Those businesses on a ‘pass through’, non-fixed energy contract potentially seeing costs significantly increase overnight on the 1st November in the event of a no-deal Brexit!
For advice on how Brexit may affect your Business energy costs, get in touch with Fox Energy, the TSA’s Energy Alliance Partner on 0800 488 0915 or email [email protected]