Scottish Power promise to cut prices as soon as they can.

mech_2

wakeupalarm wrote: »

"and don't have any shocks this winter"

Now if they buy the gas and electricity 6-12 months in advance as they keep telling us now that the oil price has dropped massively, why does a shock in winter have to have any effect on the reduction in prices?

They buy mostly between 1 and 5 months in advance according to the market data on https://www.theice.com/marketdata/ukNaturalGasView/ukNatGasWaveView.jsp. Quite often the 4th and 5th months show no trading. Trades further out are significantly more rare. Plus, given that the prices for 3 months ahead peak so much higher each year than 1 month ahead, I assume most trading centres around 3 months ahead. So they're buying a lot of gas for February right now, which still counts as winter to me.

This also means that a large proportion of the gas which retail customers are consuming as I write this were bought before the main price peak for 3-month futures which occured at the end of August.

1carminestocky

mech wrote: »

They buy mostly between 1 and 5 months in advance according to the market data on https://www.theice.com/marketdata/ukNaturalGasView/ukNatGasWaveView.jsp. Quite often the 4th and 5th months show no trading. Trades further out are significantly more rare. Plus, given that the prices for 3 months ahead peak so much higher each year than 1 month ahead, I assume most trading centres around 3 months ahead. So they're buying a lot of gas for February right now, which still counts as winter to me.

This also means that a large proportion of the gas which retail customers are consuming as I write this were bought before the main price peak for 3-month futures which occured at the end of August.

Aaah, so they now buy between ONE MONTH and 5 months? So, of those that are buying ONE MONTH in advance, I'm assuming they bought today's gas in mid-October? And I'm also assuming that the price they paid was much less than at the end of August? Soooo...who's getting the benefit of this gas bought at a reduced price in mid-October?

Cardew

Ken68 wrote: »

Doh...you right Cardew...got that wrong.
Being with Ebico, sometimes cannot get my head round complicated tariffs.
Surely someone fixing the price for several years and paying a premium (as perhaps you did) would lose out if prices are reduced.
There would be riots.

Ken,
No I wouldn't lose out at all.

I took a decision to cap. It doesn't matter if I have lost £thousands or gained £thousands by that decision; as a result of capping I am paying Xpence per kWh.

Why would I be upset if you are paying less than I? Although I might berate myself for taking the wrong gamble.

Conversely if you were paying more than me, how does that help me? Although I might pleased with myself for having taken the correct gamble!
I 'don't do' Schadenfreude!

The whole point is that eventually my capped tariff will end. I will be much happier joining you on low prices, than joining you on high prices.

wakeupalarm

mech wrote: »

They buy mostly between 1 and 5 months in advance according to the market data on https://www.theice.com/marketdata/ukNaturalGasView/ukNatGasWaveView.jsp. Quite often the 4th and 5th months show no trading. Trades further out are significantly more rare. Plus, given that the prices for 3 months ahead peak so much higher each year than 1 month ahead, I assume most trading centres around 3 months ahead. So they're buying a lot of gas for February right now, which still counts as winter to me.

This also means that a large proportion of the gas which retail customers are consuming as I write this were bought before the main price peak for 3-month futures which occured at the end of August.

But at the end of September even you said it was 6-9 months now you are saying its only 1-5 months. Most of us have read/heard the energy companies say that it is 6-12 months. A shock in the winter should not effect prices until the middle of next summer when we are using hardly any gas, or until next winter.

http://forums.moneysavingexpert.com/showthread.html?p=14389411&highlight=12+months#post14389411

1carminestocky

wakeupalarm wrote: »

But at the end of September even you said it was 6-9 months now you are saying its only 1-5 months. Most of us have read/heard the energy companies say that it is 6-12 months. A shock in the winter should not effect prices until the middle of next summer when we are using hardly any gas, or until next winter.

http://forums.moneysavingexpert.com/showthread.html?p=14389411&highlight=12+months#post14389411

:rotfl: I genuinely don't think mech is at all sure what he's talking about any more, although he hasn't lost his fighting spirit totally if his recent outburst on here today regarding people who just don't have the knowledge he has having the temerity to question him is anything to by.

He should get a job as a groundsman as he's brilliant at moving the goalposts

mech_2

wakeupalarm wrote: »

But at the end of September even you said it was 6-9 months now you are saying its only 1-5 months. Most of us have read/heard the energy companies say that it is 6-12 months.

Yes exactly, and you'll notice that I said "from what I've read". Since then I have looked at market data myself and changed my mind. I'm pretty sure they don't buy the greatest volume of gas that far ahead. Though they did seem to start buying far ahead more frequently in the spring, it didn't seem to apply as much to the second half of this year, which is what we're talking about now.

A shock in the winter should not effect prices until the middle of next summer when we are using hardly any gas, or until next winter.

http://forums.moneysavingexpert.com/showthread.html?p=14389411&highlight=12+months#post14389411

Except the 6-month-ahead prices probably peaked at a different time anyway. I haven't got a graph for that. The recent premium over the oil price is a seasonal thing which happens every year. But there was another peak in the summer which was caused by the high oil price. If we go back 6 months we fall on or around that peak instead.

This just proves the point really. If the utility companies had reduced their tariffs in July off the back of the first peak, they would just have had to increase them by more a month later. Then I expect we would hear even more grumbling by people who had just switched and then got caught out by a price change mid-switch.

mech_2

1carminestocky wrote: »

Aaah, so they now buy between ONE MONTH and 5 months? So, of those that are buying ONE MONTH in advance, I'm assuming they bought today's gas in mid-October? And I'm also assuming that the price they paid was much less than at the end of August?

Month-ahead gas peaked in mid October, so no.

Soooo...who's getting the benefit of this gas bought at a reduced price in mid-October?

Everyone. They don't seperate the gas piped to your house according to when its price was agreed you know.

Cardew

mech wrote: »

Then I expect we would hear even more grumbling by people who had just switched and then got caught out by a price change mid-switch.

Grumbling? on this forum? The very thought!!!

1carminestocky

mech wrote: »

Yes exactly, and you'll notice that I said "from what I've read". Since then I have looked at market data myself and changed my mind. I'm pretty sure they don't buy the greatest volume of gas that far ahead. Though they did seem to start buying far ahead more frequently in the spring, it didn't seem to apply as much to the second half of this year, which is what we're talking about now.

From most other people I would accept this but from you, with your attitude to people who question you, this is totally unacceptable but also a very funny (for me) and embarrassing (for you) climbdown.

Only yesterday you said this:

I

It has been explained many times how the utility companies agree gas contracts well in advance of delivery. So if they're buying most of their gas 3 months ahead of time and the prices peak at the end of August, that means the most expensive gas would be being paid for... oooh... any day now.

But it has been demonstrated on this forum in recent months that it is futile trying to explain anything to the willfully ignorant. A complete and total waste of time.

Perhaps if we could trust a word you said now and not expect you to (un)subtly shift the goalposts a couple of months down the line some of us wouldn't question you. If you are going to put yourself forward as some sort of superior authority on domestic fuel prices and become personally abusive to people who don't share your views, at least try not to contradict yourself all the time .

SwanJon

Part of what the suppliers do is prevent customers experienceing the rapid fluctuations in the wholesale market. If there is a shock in the winter, would you rather prices changed twice in the next few months (down then up), or once (down by less, or later)? (There are costs involved with each change)
Prices didn't increase 100% when oil did, and they won't decrease by 50% because oil has.
If you were in charge of buying gas for your family on the open market and could buy it in advance, how would you answer these?
The wholesale price is rising, and has been for a while. It looks like it will continue to rise. You can buy at todays prices for anywhewre between 1 month and 12. How much would you buy?
The wholesale price is dropping, and looks like it mihgt continue to drop. You can buy at today's prices for anywhere between 1 month and 12. How much would you buy?