There were continued rises in the gas and electricity markets throughout May, which was supported by increasing oil and other commodity prices. Seasonal gas prices jumped 6.3% throughout the month and winter 16 gas prices rose by 6.9%. It is believed these increases were driven by much higher gas demand due to the UK energy mix being dominated by gas fired power stations.
Gas prices also pushed seasonal power contracts higher with winter 16 power rising 5.4% throughout the month. The sharp increases have caused suppliers to pull their prices a number of times throughout the month.
Brent crude oil hit a seven month high of $50.1 per barrel caused by wildfires within Canada and supply disruption in the Middle East. Although the price of oil has been increasing over recent months, OPEC are yet to reach an agreement on an output freeze. Their latest meeting on the 2nd of June was the first meeting since the output freeze talks fell through.
Businesses have enjoyed a falling market over the last 18 months, however recent price increases have seen companies scrambling to lock in gas and electricity costs at a fixed price. Many experts believe we have now seen the bottom of the market.