Tough economic conditions and poor weather in the UK have led to declines in wholesale energy prices. Gas and electricity prices fell by 15-22% year-over-year in mid-June due to low global energy demand from slowing economies in Europe, the US and China. Unseasonably cold and stormy weather in the UK increased gas demand from households and small businesses, offsetting declines in industrial use and highlighting the economy's continued reliance on energy consumption. Future price movements will depend on resolutions to the Eurozone debt crisis and economic performance in the US and China.

1. Tough economic forces and lousy summer
weather seem to be determined to try and take
charge of the wholesale energy supply
marketplace.
Prices tumbled throughout the middle of June to modern lows. Annual gas prices are now 15%
lower than the same time last year, while yearly power costs fell to a two-year low and are 22%
down year-on-year.
Falling force prices dragged yearly spark spreads down 7% to £3.4/MWh, plus even
which reliable stalwart coal is having a difficult time of factors, with slipping prices buffering the
fall of dark spreads slightly to a £17.9/MWh premium to spark spreads.
So what's been setting off these price crashes? Well, concerns about debt inside the Eurozone
countries hasn't aided. Greece lurches from crisis to crisis plus even the election of a new
government is doing small to allay worries about its long-term future. But it's slowing financial
development in the US and China which has actually forced international stamina markets
downwards. Brent Ameratex Energy Crude Oil tumbled to $97.6/bl, its lowest level because
January 2011, and yearly API coal dropped to a brand-new 20-month low of $95.4/t.
However, all of this is advantageous news for customers. While we might be missing out on
which 'BBQ summer' the forecasters promised you, both domestic and commercial end-users
have watched power costs drop in real terms. A fall in inflation has moreover aided to stabilise
the retail market, however the big difference has been at the pumps, where motorists have
finally started to find the numbers found on the forecourts going down rather of up. This,
combined with lower electricity and gas bills, has provided the British economy a short respite,
throughout which it has a chance to push up creation and keep the fragile heart of UK PLC
beating for a while longer.
Ironically, it's been the biomass marketplace that has held the fort. Despite biomass contracts
dropping, with costs for 2013 down 1% to £88.5/t, costs are nevertheless around 6%
high than this time last year. They've recovered from their four-year low and are at their highest
level for five months. This boost has been assisted in no tiny measure with the approval of the
plans for a 40MW staw-fuelled biomass plant in Snetterton, Norfolk, that have finally been
provided the go-ahead.
The real headline grabber throughout June plus into July has been the atrocious weather the
UK has experienced. Lower than average June temperatures and storm following storm has
resulted inside a rise in UK gas demand. Supply peaked at 223.1mcm on 11th June, in the
center of the bad weather. Industry watchers believe that the unseasonably bad weather has
encouraged numerous people to do anything they wouldn't normally do inside June - they
turned the heating up. The outcome was that though the nationwide program decreased 0.1%,
the territorial program climbed 2.2%. To date, summer demand (measured from April 1st) was

2. down 7.8% found on the nationwide program yet up a staggering 31.1% on the regional system,
compared to the same time last year.
What this indicates is the fact that while gas demand for force generation is down year-on-year,
consumption by households and tiny businesses has risen. This signifies which gas usage is
acting because a barometer for the productiveness of the UK economy and whilst the big
consumers might be trying, homes plus businesses are continuing to ride out the worst of the
economic storm, placing a more positive face on what has been a difficult few months.
How costs may fare inside the upcoming limited weeks will depend on 3 items - the resolution
(or otherwise) of the Eurozone crisis, and the economic condition of the US plus China. If they
start to wobble you might see costs start to climb back up again.