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UK prices - The table and graph below shows the forward annual gas and electricity pricing. Last week was a volatile week on the energy markets, but it finished with little change. After rallying the previous week, oil dropped sharply after the bank holiday as concerns about oversupply gripped the industry prompted by rising US oil inventories and the appointment of a new Saudi oil minister who favoured a high production policy. Later in the week devastating wildfires in Alberta, Canada destroyed 1 million barrels of production and more trouble in Libya had a correcting effect on market process. Overall Brent closed the week down 4% at $45.37.  

UK prices

In the UK, sunny weather dampened the demand for oil and gas to fell prices initially. But with gas supply shortages later in the week, and heavier power station demand, gas recovered on its losses. Electricity prices were affected by planned power station outages and low wind output. Again, the week ended with little change on forward dated contracts. Markets remain volatile and susceptible to events like the Canadian wildfires. The underlying resurgence in prices remains fragile. But wholesale gas and electricity prices are holding onto a lot of their excess weight since mid-January lows. While much is still uncertain, we would repeat or advice of taking advantage of these lows and trying to avoid potential future rises.