oil prices below $50 a barrel!! still no price cut!!

1carminestocky

mech = Peter Snow?

PrinceGaz

mech wrote: »

...So what we really need is a graph which tries to estimate what the gas companies are paying for the gas which we are burning right now given that they set the price anything up to 6 months ago. We don't know what ratio of gas is bought at what amount of time ahead, but we can guess and see what range of prices we come up with. So that's what I have attempted here:

Quite apart from some very obvious problems with your graph near the start (which makes everything up until about Oct 07 meaningless), I think there are some more serious problems with it that cause it to provide a very distorted version of the truth, which you have delibrately included.

The black, green and blue lines do not represent the stated averages of the oil prices that would be paid in those proportions at the stated number of months in advance. Far from it. If anything, those "advance purchased" prices seem to be instead the price that would be paid that many months in advance if prices continued to change at current levels-- which is why all three of your future lines rise well above the actual price oil ever reached (according to your graph £69), and your three future prices are trying to make us believe the generating companies would be buying gas then for as much as £90-100. The whole point of buying it in advance is that you pay current prices for future deliveries, whereas your graph is based on them buying based on guesstimated future prices at current rates of increase (which is what causes the big increase now).

I can understand you making a fundamental mistake like that if you are unfamiliar with spreadsheets and don't understand the subject you're talking about (so such an obvious error goes un-noticed), but you seem to try to come across as some sort of expert.

Just so we can all easily review this graph, I saved a copy of it and have re-posted it in my own space (I trust you wouldn't want to enforce copyright on such misleading rubbish)


The main problem with your graph is it suggests energy prices should be very high now (which they are) and should stay that way for a few months, whereas in reality, if your graph actually tracked the future prices correctly, the current price would be already falling considerably. If I have time today, I may pull in the same oil price info, and compile the same graph in Excel as you pretended to do, but with the correct calculations, instead of those you used which were designed to justify energy costs for consumers remaining high.

1carminestocky

Of course mech has 'previous' shall we say for posting misleading info regarding the justification for current high domestic energy prices. The really puzzling this is, if he is to be believed when he says he doesn't work in the energy industry or indeed a related industry...what is his motivation for posting misleading stuff like this in order to try and justify high energy prices?


PS This is my favourite bit from his graph:

Wholesale cost based on subtracting 20p from guessed retail prices.

:rotfl:

mech_2

PrinceGaz wrote: »

Quite apart from some very obvious problems with your graph near the start (which makes everything up until about Oct 07 meaningless),

Don't keep us in the dark. What problems?

I think there are some more serious problems with it that cause it to provide a very distorted version of the truth, which you have delibrately included.

The black, green and blue lines do not represent the stated averages of the oil prices that would be paid in those proportions at the stated number of months in advance. Far from it. If anything, those "advance purchased" prices seem to be instead the price that would be paid that many months in advance if prices continued to change at current levels-- which is why all three of your future lines rise well above the actual price oil ever reached (according to your graph £69), and your three future prices are trying to make us believe the generating companies would be buying gas then for as much as £90-100. The whole point of buying it in advance is that you pay current prices for future deliveries, whereas your graph is based on them buying based on guesstimated future prices at current rates of increase (which is what causes the big increase now).

There are no guesstimations. This is all generated from publicly available historic prices for UK gas futures. The oil price is irrelevant. I should really have left it off entirely. All it serves to show is that the oil price today bears no relation to the cost of gas at the meter.

I can understand you making a fundamental mistake like that if you are unfamiliar with spreadsheets and don't understand the subject you're talking about (so such an obvious error goes un-noticed), but you seem to try to come across as some sort of expert.

I am only reporting the facts. Perhaps you should go and check them before posting another ill-informed rant?

Just so we can all easily review this graph, I saved a copy of it and have re-posted it in my own space (I trust you wouldn't want to enforce copyright on such misleading rubbish)

The main problem with your graph is it suggests energy prices should be very high now (which they are) and should stay that way for a few months, whereas in reality, if your graph actually tracked the future prices correctly, the current price would be already falling considerably.

Not so, because this is the price at the meter, not the price future gas is being traded at now. These are the prices that today's gas was traded at 1, 3 and 6 months ago. I explained that quite clearly I thought.

If I have time today, I may pull in the same oil price info, and compile the same graph in Excel as you pretended to do, but with the correct calculations, instead of those you used which were designed to justify energy costs for consumers remaining high.

I hope you use real data rather than just having another rant because you don't like paying your bills.

luckyb**

I do think that all people really want is clarity.........

If the energy suppliers do buy 6 months in advance, thats ok, just tell us when this period is up!!

So if they are due to negotiate bulk gas purchases in Feb, just tell us that!!

The smoke and mirrors they dress up the prices in helps neither us or them!This just makes all consumers feel they are buying already at the cheaper prices whether they are or not.

Cardew

luckyb** wrote: »

I do think that all people really want is clarity.........

If the energy suppliers do buy 6 months in advance, thats ok, just tell us when this period is up!!

So if they are due to negotiate bulk gas purchases in Feb, just tell us that!!

The smoke and mirrors they dress up the prices in helps neither us or them!This just makes all consumers feel they are buying already at the cheaper prices whether they are or not.

The companies buy in several different ways, Spot(instant), future at various times in advance, long term contract(years ahead to buy at the market price(less x%).
They also buy currency ahead.

The bosses of the energy comanies at the Parliamentary Committee enquiry into energy argued that to reveal the exact buying pattern of the companies is 'commercial in confidence' and it will give their opposition(including other European companies who are buying from the same sources)

wakeupalarm

Oil price now at the lowest in 4 years at $40 and heading to $25.

Any word from the energy companies yet? nope, thought not.

amcluesent

The greedy power companies must be trowsering £££ millions as the wholesale prices slump and they continue with the DD scam.

The only option is to submit under-reads until the tariffs decline.

deanos

Like i mentioned before, im sure there will be a price cut, but not until the winter demand is over :mad:

mech_2

wakeupalarm wrote: »

Oil price now at the lowest in 4 years at $40 and heading to $25.

The second link also predicts next year's oil price will average $50. That's higher than it is now. That's not very encouraging.

Any word from the energy companies yet? nope, thought not.

You must have missed this: http://news.bbc.co.uk/1/hi/business/7724218.stm