Purchase Timing

It sounds simple, but the best time to renew your contract is when energy prices are low. 

Getting it right isn’t always easy however.  Energy is a globally traded commodity where wholesale prices fluctuate throughout the year.  They’re impacted by a number of factors, ranging from the global price of oil to the weather, so they can and do change very quickly.

Whilst you may only look at energy prices a few months prior to your contract renewal date, an energy broker is constantly engaging with the market and obtaining quotes.  Their longer term view of price movements allows them to spot a good price when they see it, which improves their clients’ chances of getting the purchase timing right. 

An Early Start

For this reason, many businesses engage with a broker a year or more in advance of their contracts ending.  They provide the broker with all of the information they need in order to quote, and then leave it up to them to return when they believe it’s a good time to renew.

One thing to be careful of however, is any broker who you feel is in too much of a hurry to get you to sign a contract.  A good energy broker will track prices over a period of time, updating you and letting you know when they feel there is value in the market.  A bad energy broker will always tell you that prices are about to go up, and that you need to sign a contract with them immediately.  

Short term price movements are very difficult to predict, so if a broker claims that prices will be higher (or lower) next week, the likelihood is that they’ll be right about 50% of the time.

Tip:   Purchase timing is key, so take a longer term view.  Avoid leaving your contract renewals until the last minute, because you may miss chances to secure excellent rates earlier in the year.  Ask your broker why they feel the timing is right, and only enter into a contract when you’re confident that you’re getting a good deal.

We’re always on the lookout for competitive energy prices, so if you’d like us to contact you when we feel there is value in the market, get in touch.

Photograph Source Moose Photos on Pexels