Wholesale natural gas falls below 40p therm for first time since sept 07

savers_united

Yes, Summer 09 wholesale gas falls below 40p therm to 39p therm and continues to head downwards.
Last time at this price between March 07 - September 07.

Next day spot price 44p and falling rapidly, last time at this price mid Oct 07.

Everyone seems to be falling out of love with Gas, unusually mild weather for mid February further pushing down the price.

The big falls in retail prices are only a few months away now, no excuses!!

wakeupalarm

Wasn't there something in the news today about National Grid reporting a 4% drop in gas usage during winter compared to last year. That blows high demand out of the window as one of the excuses the energy companies will come up with to explain the lack of price drops.

http://uk.reuters.com/article/UK_SMALLCAPSRPT/idUKLH01543920090217

savers_united

It seems that supply is not an issue, our stocks are only down because we exported to Europe during the cold snap.
With better insulation and alternative fuels expect Gas useage here to keep falling year on year.

Market comment:

Contracts continued the bearish run on Friday
posting further losses. The March '09 contract
shed considerable value last week, losing
around 14p/therm.
Demand this morning is lower at 337McM due
mainly to milder temperatures, which are
currently expected to be above seasonal norm
for the majority of this week. The system is
comfortable and the Day Ahead contract has
lost value from Friday. The front month has
also softened and is offered at 43.75p/therm.
However, the Rough storage facility is
currently around 29% full and this could cause
concern if we see colder weather over the next
few weeks.
On the curve, Summer '09 continues to track
the sentiment on the prompt and has fallen to
39p/therm. Seasonal contracts are also
influenced by the softening seen in the oil
market. Brent is trading at $44.90/bbl and is
looking for direction ahead of the signing of
the US stimulus package this week, which is
hoped will try to revive the US economy. The
Organisation of Petroleum Exporting Countries
(OPEC), the cartel which supplies around 40%
of the world's oil, has said that global oil
demand will contract more sharply than
expected this year due to the economic crisis
across the world.

1carminestocky

[IMG][/img]

savers_united

Summer 09 futures now 37p / therm. Spot price day ahead fallen sharply down to 40p / therm.

However winter 09 prices still relatively high at 53p / therm, this needs to go under 45p / therm and then we are really in business.
At this price, retail customers should be looking at 50% being slashed from household Gas bills.
I think we will be there come April / May.

LNG deliveries also now coming online further pushing down the prices

Cardew

savers_united wrote: »

Summer 09 futures now 37p / therm. Spot price day ahead fallen sharply down to 40p / therm.

However winter 09 prices still relatively high at 53p / therm, this needs to go under 45p / therm and then we are really in business.
At this price, retail customers should be looking at 50% being slashed from household Gas bills.
I think we will be there come April / May.

LNG deliveries also now coming online further pushing down the prices

Without getting into the justification of price cuts and their size, the effect of a 50% cut is more than a rise of 50%.

i.e. If a gas bill of £100 last year had risen by 50% it would now be £150. Thus 'slashing' that £150 bill by 50% would bring it down to £75! So a 25% cut on last years cost.

It follows that to bring prices down to last years level a reduction of 33% is required.

savers_united

Cardew wrote: »

Without getting into the justification of price cuts and their size, the effect of a 50% cut is more than a rise of 50%.

i.e. If a gas bill of £100 last year had risen by 50% it would now be £150. Thus 'slashing' that £150 bill by 50% would bring it down to £75! So a 25% cut on last years cost.

It follows that to bring prices down to last years level a reduction of 33% is required.

Quite right, what I meant was wiping out the 50% increase seen over the past 12mths (I missed out 'The increase' to read the 50% increase slashed from retail bills), which as you mention is approx 33% decrease.

My annual Gas bill rose from £330 Jan 07 to £500 Jan 09.

I for one will not be happy until my annual bill gets back under £350 when price per therm is equal to that of 2007.

savers_united

Says it all really

Jan / Feb 09


Feb 07 - Feb 08

dannymccann

Sounds good, but money talks, I for one wouldnt be hedging on lower prices, they will do everything to keep the price artificially high, and unfortunatly that joke pic above could very well be a true reflection in some organisations.

Tis the will of capitalism

Plushchris

I hope nobody is holding their breath!

Mazio_2

The other problem for utility companies is as we insulate more and get better efficient equipment they will have to increase prices to keep their shareholders and management bonuses up.
We will always pay the same (if not more) for power as they will have to sustain their profits.