Bracing for the Surge: Day-Ahead Energy Prices Reach 6-Month Peak

Navigating Today's Energy Prices: What Businesses Need to Know

The energy market can be tricky, especially with so many global events influencing prices. Right now, we're seeing some of the highest day-ahead market prices in the last six months. A lot of this has to do with what's happening globally, especially the recent issues in Israel. Let's break it down for UK businesses, especially those looking at contract renewals in the upcoming months.

1. The Impact of the Israeli Conflict

The recent conflict in Israel has really shaken up the energy market. Oil prices have gone up quite a bit. In fact, gas prices jumped from 67.50 p/th on 05/10/2023 to 130.90 p/th just a week later.

2. How This Affects Everything Else

Higher oil prices mean everything else gets pricier too, including the cost to make electricity. This can change what businesses pay for their energy. Even with rules from Ofgem to help businesses, it's tough to avoid all the price jumps.

3. The Bigger Picture: Prices Over the Last Six Months

There's been a lot of change in the energy market recently:

• Events in Ukraine have made people look for greener energy options.

• As we move into colder months, we use more energy. But with problems like the Israeli conflict, prices go up even more.

• Even though prices are high at the moment, they're still significantly lower than they were at this time last year and in early 2023. This means there's still an opportunity to save! However, if you entered into any contracts from May onwards, it's probable that your next renewal might come at a higher cost, given the current market conditions.

4. Think Ahead: Renewing Your Contract

If your business has a contract ending in the next six months (through Autumn, Winter, and maybe Spring), this is important for you. Prices might go up more, so now might be a good time to renew. Especially when you think about how much higher prices were last year.

Wrapping Up

Energy prices change a lot, and global events play a big part in that. For businesses thinking about their energy contracts, it's a good idea to keep an eye on what's happening and plan ahead. At The Smart Energy Company, we're here to help you make sense of it all and get the best deal. Let's work together to make sure you're prepared.