The summer is officially over. For me, it’s not the date that marks the occasion but when I find a thin layer of ice on my car’s windscreen in the morning and use my heat seaters for the short drive to the gym.
Like many others in the UK, I dread the winter months as I know it means a sharp increase in my heating bills. And this year looks set to be a record month for energy pricing.
There are several reasons why European energy prices are on this wild trajectory. Think about how harsh last winter was. And how long it lasted – well into April. Covid and Brexit have made their own contributions to this perfect storm. And a global surge in demand for gas exhausted many reserves of natural gas, massively impacting the UK energy supply of heating, industry and power generation.
And whilst we may have been grateful for calmer weather, wind generated energy was at an all time low due to the lowest wind speed recorded since 1961.
As of last week, over 1.5 million energy customers across Britain lost their energy supplier, following the rising cost of buying wholesale gas. In September alone, seven firms collapsed.
With many more energy providers at risk of folding, the energy market appears to be in triage. As the law of supply and demand dictates, when there is a shortage of something, its market value and price shoot up. For example, consumers are currently facing a 50% increase in their energy bills.
So what does this mean for trading energy?
A RAY OF LIGHT
Anyone who trades commodities will appreciate how volatile the markets are and how these recent events will impact trading prices and decisions. Not to mention the vast exposure to risk.
At CTRMCloud, we enable clients to navigate this turbulence with ease. Our trading platform will identify the risks associated with the assets in your portfolio, and display them via a dashboard. So you have a single, consolidated view of your position and financial landscape, enabling you to hedge faster, smarter and safer.
That’s risk management. It’s what we do.