Transportation Costs are set to change in April and initial estimates of the figures suggest steep rises ahead.

The fixed costs that consumers have to pay over and above the actual price of energy include tax, environmental levies, metering, transportation and distribution charges.

Gas transportation companies increase their costs to gas suppliers periodically but this year, on top of the expected biannual rise, the industrial and commercial sector will have to fund a shortfall in the value of Unidentified Gas. This will result in a further increase in the transportation charges levied by the transporters.

Transportation charges make up around a sixth of the average gas bill and suppliers are always keen to minimise the impact of price changes on their customers. However, this time the changes are likely to be significant, as are the cost implications for business energy users.

The actual figures will be released in the coming weeks but these are the key factors influencing the rise:

Unidentified Gas

Unidentified gas is unattributed energy and includes leakages and stolen gas. Until now this cost has been met by domestic users but transporters are now required to recover these losses from across the industry. This could push up transportation costs by up to 5%.  

Transportation Increases

The rising cost of transportation will also lead to rises in transportation charges and although this will vary according to the size and location of the supply point, advance notification of the changes indicates that the transportation element of a bill could rise by up to 10% as a result.

We will be keeping our clients informed of updates and price changes and there is more information on rate changes and Unidentified Gas atwww.gasgovernance.co.uk

UK gas and electricity prices have fallen back after a mid month rally influenced by cold weather and concerns over possible disruption to LNG supplies. However, looking ahead there are a number of factors that could see prices start to rise again.

A vote is expected in the European Parliament at the end of February on plans to tighten EUA supply and a yes vote could see 1.4 billion in CO2 allowances taken out of the market pushing up EUA prices.

Middle East tensions could flare if the UN imposes sanctions on oil sales from Iran and the Iranians have threatened to block a major route, the Straits of Hormuz, which is used for moving a quarter of the worlds LNG shipments and 20% of oil transportation.

Some of the factors that led to rises last year, however, are unlikely to impact on energy prices in 2012. The Australian floods caused significant shortfalls in coal supplies last year but this year’s La Niña is nowhere near as powerful.

The UK is also likely to have a high surplus of electricity in the third quarter of the year, with production bolstered by the Pembroke power station, and this is also expected to suppress prices.

Energy prices have begun the year on a bearish note thanks to a combination of mild weather across Europe and favourable supply predictions for the months ahead.

Last year was the second warmest on record and this factor, coupled with the ongoing lack of global economic growth, means the start of 2012 sees gas and electricity prices at their lowest for many months.

French analysts expect demand for gas in Europe to be below pre-recession levels until around 2017 and this may lead to price reductions. However, bad weather has forced the planned opening of Norway’s Skarv gas field to be put back to Q2 of this year at the earliest, delaying availability of supply from this source.

In addition, there may be a shortfall in output if expensive post-Fukushima safety measures force some of France’s nuclear power stations to close and this could have an upward impact on energy prices.

One of the world’s leading experts on energy prices has predicted that oil prices will rise in the year ahead.

Fatih Birol, chief economist at the International Energy Agency, said he expected global demand for crude oil to rise in 2012 to around 1.3m barrels a day.

Speaking on Bloomberg he acknowledged that this growth in demand was not as significant as had been previously predicted due to the continuing downturn in the global economy but he warned that measures needed to be taken sooner rather than later to maintain output and avoid a steep rise in energy prices.

One of the key measures he outlined was the need for further investment in Middle East countries. He said these countries would need to provide the additional oil needed to meet rising global demand.

Keep an eye on the Orchard Energy website for more market intelligence

Energy prices have bounced back over the past fortnight after October’s price falls, partly due to cooler temperatures in the UK and oil going above $115 a barrel.

Other factors pushing up prices at the moment include news of more maintenance plans at power stations in the UK which will hit electricity production next summer.

Further afield, predictions of extreme weather in Northern Australia due to La Nina are influencing prices with some analysts anticipating a knock on effect of reduced mining and energy output.

The economic gloom continues to have a downward effect on energy prices but this has been countered to a certain extent by claims from the head of the Economic Policy Centre that shale gas extraction produces CO2 emissions equivalent to coal burning, another blow for the shale gas industry and one that could affect future production.

For advice on how energy markets affect your business energy bills contact Orchard Energy on 0844 581 0844

Orchard Energy’s consultants now have mobile access to Live Trading Screens so that we can give clients the most up to date information during meetings.

The Eurozone crisis is continuing to have an impact on energy prices amidst fears of a double dip recession.

We saw Brent Front month fall back to February prices in October, a drop that was influenced by bearish sentiment across the markets and by the Eurozone crisis  and the uncertainty surrounding its  rescue plan. At the same time Front Month Coal was also trading slightly down at $115 compared to $120 in February and pressure on Coal for 2012 was pushing prices down, driven byhigh inventory levels worldwide and the fact that India is to yet buy Post Monsoon Coal. 

Whilst there is an expectation that prices will continue on a downward trend moving forward, some analysts are more bullish, believing oil prices will rise due to the Opec Nations, in particularly Saudi Arabia, reducing their oil production.

For more information on purchasing business energy and energy prices contact one of our team on 0844 581 0844.

Global economic factors have helped to push oil prices up after falls in early October saw Brent Crude fall to its lowest level since February. Promises of further stimulus measures from  the US Federal Reserve and discussions in Europe aimed at offering more support to the banks counteracted the uncertainty surrounding the Greek economy.

Looking back over the year, front month trading of Brent was at its highest in April at just above $126/bbl. At the start of this month it fell below $100/bbl, giving us prices that hadn’t been seen since way back in February. The recovery in prices that followed means it’s currently trading at around $112/bbl.  

Unseasonally high UK temperatures in early October also had an effect on prices and as the weather returned to the seasonal average this had an impact on day ahead contract prices, which rose accordingly. At the same time, good supply forecasts for LNG helped to reduce the cost of front month contracts.

To discuss how Orchard Energy can help you with your business energy contracts call us on 0844 581 0844.

Late September's unseasonally warm weather affected short term day ahead energy prices towards the end of the month.

In general all the major commodities saw falls in the month of September. At the begging of the month, Brent Front month was trading at $114 and by the end of the month had dropped to $103 and Coal started the month at $122 per tonne and finished on $115.

Gas prices started higher with Oct 11 Annuals priced at 71.10p per therm and £57.18 MWh at the start of the month. By the end of September these had fallen to 67.03p and £54.75.

The weather wasn't the only factor influencing falls. Dollar vs Sterling and LNG shortage concerns had an impact and the overriding factor was the state of the economy and the Eurozone countries, with fears over Greece defaulting on debts.