Eurozone turmoil causes volatile oil prices

The economic unrest in the Eurozone has caused volatility in oil prices, reveals energy supplier npower. The news was reported in the company’s latest energy market update, designed to help energy professionals better understand the UK power market to more effectively manage their energy price and volume risks.

Magali Hodgson, npower’s expert from its award-winning Optimisation Desk, comments: “Last week, the political to-ing and fro-ing of the Greek debt crisis caused upheaval in oil prices. News that a bailout package had been agreed for Greece caused Brent oil prices to gain $2/barrel in one session. However, George Papandreou’s announcement that he would hold a referendum added to the uncertainty. The referendum was quickly called off which then led to oil gaining in value towards the end of the week.

“On the home front, the balance of winter lost some ground due to warmer than predicted weather. This resulted in Dec’11 power losing £3.35 and Q1’12 losing £3.50 over the fortnight. The clocks going back mean we are seeing the winter demand profile with coal generation being the preferred fuel over gas. Nuclear generation also increased to run at an average of 20% of the stack.

“Looking forward, Brent oil prices will continue to be volatile as the Eurozone crisis continues. The real test to UK energy prices will be if and when the weather deteriorates. We saw last winter how prices reacted to below average seasonal temperatures, so bullishness may come to the prompt sooner than expected if we see a cold snap over the coming weeks.”

The npower energy market updates are filmed on a fortnightly basis by independent news agency, Energy Live News. They are delivered from npower’s Optimisation Desk, which is a unique service that provides businesses using flexible purchase energy contracts with access to information on the UK wholesale energy market and up to date advice on an individual basis.

For more information and to access the updates click here. To suggest a market update topic of interest or to discuss its content, please contact Magali Hodgson at npower by emailing business@npower.com.