Energetics monitors Australia’s energy markets every day. Over recent months in the east coast gas markets, we have continued to see improving contract prices even though the first signs of higher spot prices have arrived - coinciding with increasing winter demand.
With 5-10 year long term gas deals expected to be upward from $8/GJ and retail market offers of up to three years currently achieving $10/GJ or even less in some cases, it can be argued that at these prices we may be close to the floor in terms of price sensitivity. Just 12 months ago, prices were as high as $19/GJ driven up by the domestic supply shortfall largely brought about by the commencement of LNG exports out of Queensland and a reduction in competition. As these pressures remain, prices could rise at some point in the future.
If you are a large gas consumer, Energetics believes that now may be an optimal time to engage the market and consider a new contract - regardless of where you might be in the buying cycle.
Energetics can help you assess the trends and work with retailers to negotiate not only on price, but also to secure favourable terms and conditions. Please contact the author or your Energetics’ account manager.