Today’s video is just a quick market update. You may have noticed since the beginning of 202,1 a little bit towards the end of 2020, wholesale prices started to take quite significant uptick. Gradual at the start and then start growing in pace and ferocity. Yesterday was the first day in all of 2021 where we really saw an easing of those prices for a bit but unfortunately back today we’re up for quite a significant increase yet again. There’s a lot of reasons behind this, mainly European carbon prices, the UA is breaking 55 Euro, to put that in context it’s a all-time high. It’s always traded significantly lower than that, even last year when there was a peak of 30, one year before, sorry, it came down quite quickly but with all the renewed interest and net zero and quite a lot of political pressure driving down carbon emissions there’s a significant uptick in the requirement for the UA or at least in the sentiment behind UA’s pricing. Couple this with cautionary inflation figures from the U.S. So the U.S has made several announcements linked to their monetary policy which are not good and all the signs do point to inflation which of course has quite an impact on commodity pricing. So there has been commodity rises across the wider complex. We did see a slight curtailing of oil prices settling around about 66 dollar mark.

What does that mean for people with renewals in 2021 or people with exposure in 2021?

Well you don’t want to be leaving it without looking into it. It can be tempting to hold off because it’s not good news,  people are seeing significant increases across the board but you know it’s key to remember that taking no action is still taking action because you’re still making a decision whether to enter the market or not and the least we can be doing is looking at the exposure together, quantifying it and looking at our options around it. There are not too many bearish sentiments on the horizon and some people can

be tempted into the sort of old adage of prices going down in the summer but there are so many variants and let’s consider that we’ve just come out the most significant year; 2020, where we’ve all seen new territory, unprecedented changes in nearly every aspect of life. I wouldn’t rely on historic pricing strategies and market movements to base future market decisions on so this is really for anyone with any exposure in 2021, even into early 2022, is just to be considering your position, what sort of strategy you want to manage, that exposure we’ve seen a number of renewed political attention and tensions which haven’t been there for a while in the last few days. So far I don’t see that playing too much into the market but it could set a tone for what the rest of the years to look like. We can speculate as to the year that we’ve just had what that means in regards to international relations across the globe and we could also speculate what that would mean for tensions in the middle east, will we see a return to that? But today with the figures and the information that we have now is very much prices are on the up and considering where we are in regards to our fiscal policies and recovery from coronavirus financially speaking it would be extremely unlikely not to see some sort of inflationary effect, as we print more money then obviously the value of that currency goes down, which means the cost of commodity goes up in relation to the value of the currency and I would say that that’s a key consideration when you’re considering your pricing and your exposure a deflated currency is more of a longer-term issue. It doesn’t go away straight away, it takes significant economic recovery to change that and that should definitely be a key factor when looking into energy prices.