May 17, 2020

Crude Oil Bullish, Gasoline Declining Post-Sandy

crude oil after Sandy
Atlantic Superstorm Sandy
oil prices
2 min
Crude oil prices are increasing after Superstorm Sandy hit the Northeastern United States
Crude oil is bullish today after Atlantic Superstorm Sandy has dissipated from the Northeastern United States. Many refineries have restored operations...

Crude oil is bullish today after Atlantic Superstorm Sandy has dissipated from the Northeastern United States. Many refineries have restored operations (some at reduced rates) after closing while the storm struck, according to Bloomberg.  The New York Mercantile Exchange (NYMEX) opened Oct. 31 to a 1.6 percent increase in crude oil for December. The NYMEX was closed during the storm along with most businesses and transportation services in New York City, NY. This increase may also be helped by the news of a fire at BP PIc's Texas refinery.

Two-thirds of refineries in the region affected by Sandy were closed on Monday, Oct. 29, and/or Tuesday, Oct. 30, according to Reuter's. BP CEO Bob Dudley predicted in an interview with CNBC yesterday that the crude market would recover quickly, due to an efficient distribution system, although he expects a slowdown in refining and distribution for a while. The average price for regular unleaded gasoline today is down to $3.521 from $3.534, according to AAA.

Read More in Energy Digital:

Oil Companies Prepare for Hurricane Sandy in Northeast

Sandy Leaves Millions Without Power, Death Toll Climbs

The increase in crude demand means the start of depletion for the U.S. crude oil stockpiles, which rose 2.1 million barrels to 371.7 million barrels according to the American Petroleum Institute, while gasoline supplies (which were halted without the utilization of crude oil) declined. However, a Bloomberg survey of analysts predicts stockpiles fell 500,000 barrels and crude supplies increased by 1.75 million barrels.

The U.S. Energy Department is expected to release its inventory report (previously scheduled to release today) tomorrow, says spokesman Jonathan Cogan, which should give some more exact numbers to the status of the oil and gasoline industry post-Sandy.

Share article

Jul 26, 2021

Ofwat allows retailers to raise prices from April

Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

Share article