18th January, 2022

There’s no doubt that the rise in energy prices could have significant impacts over the next weeks and months.  The bull run which seemingly started out as a reaction to post COVID19 demand recovery, investment flooding into carbon and commodities, as well as what at the time was manageable supply disruption has become deeply serious. 

Today, the markets are in choppy waters, where political tensions and threats are rocking the boat, creating huge volatility and uncertainty from which the economic impacts could be felt for some time to come. 

The forward price of energy has at times quadrupled since the same time last year, and what was at the start a short- term market reaction, looks to have set in for much longer.   

It is the pressure on global gas pricing the main cause of the bullish signals across the energy landscape, where tension between Russia and the Ukraine presents a risk that Russia might stop its supply of natural gas into Europe. If Russia were to continue to supply at current levels, then storage levels across Europe will be at their lowest ever levels for the time of year. 

Colder weather, were it to come this winter, could see demand out strip supply across Europe, with it the power markets will likely see pricing remain at these unprecedented levels. 

The ramifications of something longer lasting are huge across the European economies as industry takes direct action to avoid additional cost, and consumers take the brunt of the inflationary impacts as well as the direct increase on energy bills. 

If your business is struggling to manage its exposure to energy markets, contact our team at info@juvoenergy.com