Global demand for oil this year is on track to reach a new record. This is due to a surge in demand as China bounces back from their covid 19 restrictions. As the country’s economy grows so does its appetite for fuel. This has already led to the price of oil rising per barrel.
Not only is demand rising for oil but recently some of the world’s biggest oil exporters have cut down their production. This reduction in supply and rise in demand could push up prices even further.
Although Oil makes up one of the smallest percentages of the UK energy mix, this could still have an overall impact on energy prices in the UK and the global wholesale energy market.
Russia also warns that there could be low gas supplies
The rise in energy demand globally is not helped by potential shortages we could see throughout the year. For example, Russia has issued warnings that winter gas supplies could be low in 2023.
The Russian energy giant Gazprom issued warnings that temperatures this winter might not be as mild, which could leave the EU short of gas exports.
This warning combined with the rise in demand for oil could be leading to consumers in the UK seeing higher energy prices again.
What does this mean for your energy bills?
Since the beginning of 2023, energy prices have decreased a lot compared to 2022. However, with the geopolitical issues that seem to be arising in the global energy market, this might not last for long.
If you know your energy contract is coming to an end this year, it might be a good idea to start shopping around for a new energy tariff whilst prices are low. This will allow you to avoid any price hikes we are going to see throughout the year.
If you are unsure whether now is a good time for your business to sign its next energy deal, why not get in touch with us today? Our team of energy consultants have inside market expertise and can give you advice for your specific business. Get in touch with us today or get a free energy quote here.
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