Energy: 'good time' to buy

18 October 2006
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19 October 2006

Gas and electricity prices have plummeted in recent weeks and now could be a good time to capitalise on them, according to energy consultancy John Hall Associates.

It said rates for 12-month gas contracts, with delivery from October 2007, fell from 55.59p/therm on 11 September to 49.70p/therm as SM went to press. Prices for the equivalent product in the electricity market fell from £47.65/MWh to £43.70/MWh last week.

John Hall, managing director, described the drop as a respite for energy buyers who have had to bear the brunt of increases in recent years.

Damien Cox, analyst at John Hall, told SM that energy buying continued to be a "fine balance" as a raft of factors could affect prices.

But, he said, for risk-averse purchasers who have not yet arranged supply for winter 2007, it could be a good time to buy. More adventurous professionals could hold out to see if prices continue to drop, he added.

Prices have fallen in part owing to improved infrastructure, including a new trunkline between Norway and England, and the absence of the hurricanes that affected US refineries in 2005.

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