Assured Energy Update – September 2021

Energy Buying Support for Independent Hoteliers

Energy market rates continue to rise at alarming rates. We advise hotels to review their current energy deals and clearly plan their management of this category over the coming year.

Recommendations

Prices have continued to surge higher still and further volatility is expected to continue in the longer term, and we are expecting underlying increases in pricing due to the gas storage situation along with the current supply side issues. As the winter approaches, the strength of the anticipated cold that comes with the season will have differing impacts on the price of energy. For example, colder than average weather will entice stronger demand which will in turn cause prices to surge. Extreme cold will exasperate this upward trend further, whilst a “normal” winter with temperatures in line with the seasonal norm will allow for some losses in the market possibly, although this will be heavily reliant on a ramp up in supply via LNG which continues to look strongly unlikely. Therefore, we can continue to expect lots of risk premium to remain in contracts for the time being as it would be folly to rely on the UK weather to come in above average throughout the whole winter period; because of this urgency is encouraged with regards to new renewals as the longer the weak gas storage situation ensues (which could coincide with colder weather over the winter), the more we will continue to see prices rise in the future also.

Utility Trading Graphs

Electricity