After ‘Beast from the East’ and ‘Pest from the West’, the weather appears to be settling down. However, forecasters are warning of snow over the Easter weekend which may make things rather difficult for the Easter Bunny!
With this being the third cold spell we’ve seen this month, the Easter bunny isn’t the only one having a particularly difficult job. For energy brokers, March has been a very tough month, and we were hoping to see the back of the volatility.
How did ‘The Beast’ and ‘The Pest’ affect the energy market?
The initial unexpected cold snap we had in the first week of March saw gas prices rise to the highest day-ahead price in 10 years. Luckily things have settled since but who knows what the next cold snap could bring.
Why does cold weather cause volatility?
In the UK we have gas storage stocks that in standard weather conditions can handle the demand, however, when unusually cold spells hit, there just isn’t enough to go around. In this instance, the first two cold spells will have depleted a lot of the UK's storage stocks, so another cold snap could see prices go up even further.
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