OK so where do we go from here??

Canny_mal

Following the huge rises we've seen over the last few weeks where do people think energy prices will go over the next 12 months? Are we likely to see further hikes or maybe even, dare I say it price cuts at some point before the end of next year? At the moment it just feels like there's no end to the increases.

The reason I ask is I'm trying to decide whether to cap my rates now. Scottish Power have brought out a capped rate till 30th Nov 09 which, based on my past 12 months consumption, would only be £10 per year more than what I would pay if I stayed on my current tariff. However, my calculations are based on the fact that my current deal is the Electricity extra saver 5 with Eon which includes a 20% online discount but this is only garenteed until Apr 09. Assuming they remove this discount in Apr I'd be substancially better off moving to the capped Scottish rate, even if Eon don't raise their unit prices again next year.

Just to complicate things further Scottish are also offering an online discounted tariff which will remain 3% below their standard rates until Oct 09. Based on my annual usage this would be just over £20 less than their capped rates.

My decision has to be based on the likelyhood of further rises next year.

Any thoughts?

PS I should have added that there's a £30 exit penalty if I was to switch from the capped Scottish rate before 30 Nov 09

Cardew

The question in your opening sentence is the only thing that matters, and the detail you included below is all dependant on the answer.

The reduction in the oil price over the past couple of weeks is bound to be a factor and IMO will delay the ever upward spiral of energy prices, or even produce a token reduction - although that I doubt.

Again IMO I believe that the long term trend in energy prices will be upwards and upwards.

If I have read your post correctly, you have little to lose by taking the Nov 2009 SP deal.

paceinternet

Anything could happen, but what is definitely happening at the moment is that world demand for oil has most likely reduced due to the global economy slow down and high prices. So you are seeing oil prices going down. If and when this filters through to domestic energy we will see, but it should.

Electricity: What you may also be seeing is huge investment in renewable electricity generation projects which needs funding, but should produce relatively lower cost electricity in the future.
Gas: ??? Can only go up because of where it comes from!

Edit: posted same time as Cardew, but looks like we have similar opinions.

1carminestocky

(This is ALL to be taken in the context that what I say is just my opinion and NO-ONE knows what's going to happen in the future, expert or beginner) I would predict that gas prices will level off over the next 12 months as the worldwide recession bites, leading the price oil to fall due to depressed demand. The energy companies seem to have been caught with their pants down on this one, what with the price of oil plummeting whilst the cost of wholesale gas continues to rise. Correlation between the 2? Did we REALLY say that?? lol. Such an influential source of financial thinking as George Soros was of the opinion that much of the silly recent rise of oil prices was almost wholly as a result of speculators getting in to make their killing. They appear to have now 'moved on' to their next target.

But, of course, this is the energy companies we are talking about and they don't tend to lose out long-term so expect to see 2008 gas-type rises in the cost of electricity during 2009! Like has been said above, this will be blamed on the need for investment in nuclear blah blah blah. Swings and roundabouts. I'm still not sad I didn't (eventually) go for a fixed product. There's always up to £250 cashback available per year if you are a serial switcher and my recent experience of energy companies tells me I wouldn't want to commit my future to any of them, tbh.