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

1carminestocky

mech wrote: »

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.


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

LOL! It's ever so slightly more encouraging than what the so-called 'experts' were predicting 4 short months ago. Talking of so-called 'experts', Phil Bentley (BG head honcho but I'm sure you already know who he is) was stating 4 short months ago (there's that phrase again) that 'we are now heading into an era of unprecedented high energy prices'. I'm assuming he was referring to BGs Fixed Tariff 2012. :rotfl:

I know you say you're not an energy company employee and of course I have to accept that, but blimey you don't half come out with similar 'arguments' to them for justifying current prices...

MrsBartolozzi

Hey, legit question here so please don't bite my head off
Why should low priced crude oil affect the price of household gas? You don't make gas from oil, do you?
I know natural gas is found with oil, but the volume of gas is not related to volume of oil, so why are the two prices related?

Thanks,
MrsB.

logie28

MrsBartolozzi wrote: »

Hey, legit question here so please don't bite my head off
Why should low priced crude oil affect the price of household gas? You don't make gas from oil, do you?
I know natural gas is found with oil, but the volume of gas is not related to volume of oil, so why are the two prices related?

Thanks,
MrsB.

Its a great question with no real definitive answer (excuses being made for and against), the trends of markets usually follow, i.e, rises in crude oil , gold, gas and other commodities,

When the market is doing well , normally its reflected through out the whole market.

The reason crude oil is quoted on here so often, and rightly or wrongly linked to gas prices is for one reason.
When the markets where spiralling out of control. $148+ a barrel of oi. extortionate metal prices etc. the utility companies again and again linked these with gas price. probably right to do so,.
On many occasion, the excuse of rising gas prices was linked and attributed to rising oil prices.

Quotes are available from the big six referring to rising markets and using rising oil as an excuse as we could directly see this, with rising petrol prices and media coverage.

I personally use their information , high oil prices= high gas prices, because they seem to forget this when markets fall.

i.e oil prices below $50 a barrel, petrol prices cut, gas falling prices , (in line with the market) prices still stay the same!!!

1carminestocky

MrsBartolozzi wrote: »

Hey, legit question here so please don't bite my head off
Why should low priced crude oil affect the price of household gas? You don't make gas from oil, do you?
I know natural gas is found with oil, but the volume of gas is not related to volume of oil, so why are the two prices related?

Thanks,
MrsB.

It's the energy company's theory not ours. At least, it USED to be their theory when oil was $147 per barrel at the end of July but it seems they have cooled their support of this 'theory' now it's fallen by over $100 per barrel. Seriously, you couldn't make it up, could you? :rotfl:

logie28

BTW only one of the big six, has predicted "possible price cuts in the new year"

Wasnt long ago when we was told to brace our selves for an increase at Christmas time!!

They are now in a position to say we will cut our prices by ??? in the new year so join us!!

How do i know this? Because they said so them selves.. they are quoted at saying that when there is a sustained period of low prices of gas prices i.e now , over the last few months. They would be in a position to cut/announce price cits!!


STILL WAITING!!!!

PrinceGaz

mech wrote: »

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.

Actually I think that is very encouraging. If next years oil-price averages only US$50 per barrel (only slightly higher than it is now), then that will mean energy prices will return to levels seen during 2005.

According to historical data on price changes available on uSwitch, since mid 2005, energy prices have increased by (these were calculated on a spreadsheet inputting all the changes and calculating the effect of it on the rate at that time the change was made)

British Gas - Gas 95.7%, Electric 59.8% (starting with Sep 2005 increase)
E.ON - Gas 100.6%, Electric 68.3% (starting with Jul 2005 increase)
EDF - Gas 95.0%, Electric 57.9% (starting with Oct 2005 increase)
nPower - Gas 92.3%, Electric 74.0% (starting with Jan 2006 increase)
Scottish Power - Gas 94.5%, Electric 50.1% (starting with Jul 2005 increase)
Southern - Gas 95.8%, Electric 72.6% (starting with Jan 2006 increase)

Inflation of everything other than the very high increase in gas/oil should be included in this, and a rough guesstimate by me over the three years from 2005 to 2008 is that 10% of the total price increase was caused by that. So that gives an average real increase in gas prices of about 85%, and of electricity by about 55%.

That means that, if your prediction that oil prices will climb back up to an average of US$50 per barrel during 2009, we should by your reckoning see price reductions for consumers of about 45% from current levels on gas (bringing it to 55% of current prices), and about 35% on electricity prices (bringing it to 65% of current levels). Thanks for that, it's great that you've given us such good news on forthcoming price-cuts, mech, as normally you predict doom and gloom.

Of course, if oil prices don't climb back up to US$50 per barrel next year, but instead fall further as the world recession deepens and manufacturing output is cut back further (which recent reports suggest it will), the price reductions for consumer energy supplies may well be significantly better.

Given the above, a 20% cut in gas prices and 15% in electric with immediate effect should be easily affordable given how they look to future prices when deciding what rates should be now. Further price cuts would follow in the spring to bring prices down in total from their current levels to the amounts they should then be (which would be a somewhat higher percentage cut than the one I suggest now).

I think your prediction is very encouraging, mech. And I hope it is correct (or even falls short of just how low oil prices are next year)

OldGreyFox

logie28 wrote: »

BTW only one of the big six, has predicted "possible price cuts in the new year

SSE (and now British Gas and E.ON) have suggested they may cut costs for consumers in the New Year.

1carminestocky

OldGreyFox wrote: »

SSE (and now British Gas and E.ON) have suggested they may cut costs for consumers in the New Year.

Very encouraging. Only 50% less than the amount of companies who were warning us of an imminent increase a few months ago due to the price of oil :rolleyes:

logie28

Funny this utility business isn't it, they know now they will put prices down in the new year,( prob towards the end of the winter billing period) pressure is building on them to do so and falling/consistent prices dictate they have to pass on the saving to their customers.

Why do they give us this cr!p? they are holding out for the last £ they can squeeze out of there customers!

what is the government doing about it? I know pressure has been applied, but no where near enough! Good old Gordon is shouting at the naughty banks to cut their interest rate to pass savings on to customers, we isn't he doing the same thing to the utility companies on a weekly basis?

Simply saying they MAY lower prices in the new year just isn't good enough!!

1carminestocky

And, of course, British Gas is STILL pushing its 2012 fixed tariff as if its very corporate life depended upon it. They even have the audacity to stick a sticker on its ad box :eek: . The whole thing just stinks IMO. Very badly.