Gas Glut Could Mean Lower Prices Next Year

DirectDebacle

(Reuters) - The European Union's natural gas network is likely be oversupplied by over 10 percent of last year's entire consumption, infuriating customers howling with pain from price hikes.
Europe's oversupply, according to Reuters research and analysts' data, calls into doubt last summer's decision by many utilities to raise their retail gas prices for 2012.
Many gas providers launched long-term, typically two year, fixed price deals that would hold off further increases, but would also not reduce rates should wholesale energy prices drop.
"If excess gas production drives down wholesale costs we would clearly expect this to be reflected in the retail prices customers pay. Suppliers need to play fair by their customers around price changes," Audrey Gallacher, Director of Energy at Consumer Focus, said.
"Fixed-price deals are a gamble which can pay-off if prices rise. However long-term fixed price deals would certainly not benefit customers if the wholesale price trend is downwards," Gallacher added.

Ah well, seeing is believing.

undaunted

Hmm, shall we start a sweepstake now on the best excuse for prices not falling next year then?

jackshelac

I believe wholesale prices for electricity fell 20% since march 2011 and energy companies increased their prices by about 20%. So that would take a drop in wholesale prices of at least 40% before the companies announced any price reductions.