Assured Energy Update – November 2020

Energy Buying Support for Independent Hoteliers

Market Conditions / Price Drivers:

· The coronavirus virus has resulted in surplus energy storage, resulting from shutting of factories and a collapse in travel (supply Vs demand).

· The weather experienced last winter was mild and therefore related increase was not passed on (supply Vs demand). Furthermore, temperatures are set to remain higher than usual.

· Stock Markets around the world crashed in March/April wiping off trillions of the global economy, a road to recovery has started.

· Crude oil prices nosedived to a two-decade low trading at $20ish dollars a barrel prior to making a recovery to around $40ish dollars a barrel (supply Vs demand once again a key driver).

· The Brexit uncertainly is impacting the market

· The Pound Vs Euro has been quite stable and this has kept rates really competitive

Utility Trading Graphs

Electricity

Gas

Recommendations

In the current climate we would not recommend waiting to renew your Energy. You’ll see from the insight that prices have continued to rise considerably and clients should take advantage of what in the grand scheme of things is good value compared to where prices could drift to if no action is taken; that it would make sense to secure a contract now.

Without getting too technical, a government vote surrounding reducing available carbon emissions by 60% earlier than scheduled to meet government targets is expected at the end of next month and depending on the outcome we could see prices rise even further. Carbon has an impact of on both gas and electricity pricing as it produced as a by-product in the generation of the two sources of energy. Therefore, this could be something that causes a lot of volatility moving forwards.

It’s impossible to say where we could be at in a year’s time due to the current factors at play in the market, namely the above, COVID-19 and other supply/demand factors. We could very well see prices fall in the future especially if we continue to experience a second wave of the virus, causing more disruption to the economy, whilst a warmer winter could have a similar impact. With the pricing available right now and the potential risks moving forwards, we would say it is less risky to get something secured now.

This information is provided by our HCC Market partners, Assured Energy, who are part of The Consultus International Group. Any information provided is given on an advisory basis and both HCC and Assured/Consultus are in no way liable for any action taken by the reader with regards to their energy purchasing.

If you need help with your energy purchasing, then sign up for our Energy Purchasing treatment at https://www.hotelcostclinic.com/bookings-checkout/energy-purchasing

While you are here – check out all the support and advice that HotelCostClinic.com has to offer.