Gas Prices up 13% today.......

spot1034

Another big rise today. This cannot go on, but in the short term I reckon there must be some smaller suppliers who thought they might be able to ride this out who are now wondering if they can survive if they have customers who opt for the SVT at the end of their present fix. 

[Deleted User]

Ant555 said:

Just out of interest, what needs to happen in the world for the gas prices to start returning to last years levels?

We could start fracking as is the case in the US! Demand for gas is unlikely to fall as most countries are shutting down their coal-fired power stations and using gas whilst building up their renewable power sources. China is also desperate for energy and a large chunk of our ‘diverse’ supply -  that is the LNG from the Middle East  - is heading East rather than West as China is prepared to pay more.

Last year’s levels will never return. The wholesale cost of gas which was just over 1.2p/kWh was only possible because of the impact of COVID on manufacturing.

tghe-retford

[Deleted User] said:

Wb90 said:

What can realistically be done? As has been mentioned already, if prices continue to rise or even remain as they are, many people simply will be unable to afford to heat their homes at all.

Something would have to give somewhere. But what and how?

I just did a requote on the same tariff I signed up to 2 weeks ago and it has almost doubled in that time, which would be 2.4x what my September DD cost. That would be difficult for me to manage and many are already struggling before any price hikes.

I don’t envy whoever’s responsible for getting us out of this mess.

Well it’s not The PM. He doesn’t seem to want to accept that there is an issue that he needs to get involved in. It’s just the economy waking up from its COVID slumber. By trying to argue that there is a case for more renewables, no one is addressing the ‘elephant in the room’. That is, who is going to pay for new heat pumps; radiators and insulation in millions of properties - many of which were built pre-War.

There will undoubtedly be a very rude awakening for the Government next April when a much increased Ofgem cap kicks in; along with the increase NI and much higher Council Taxes. I cannot see voters standing in the streets and clapping for our PM.

That's the thing. Viruses do not implement financially ruinous lockdowns, Governments do. In the same way that global warming carbon dioxide does not implement environmental policies, Governments do.

Boris can promise magical unicorns that cough up banknotes for every household if he wants but if it isn't viable, his popularity will sink and his electoral chances will go with it at the next election. Governments are great at thumping lecterns, talking and promises (they keep repeating the phrase "build back better" at every opportunity they can get) but not so much at action.

I think the way out of this is private entrepreneurship, research and innovation. The free market will find a way out of it. But it has to be viable and financially sound. Take solar roadways, the idea of replacing the roads with solar panels - the answer to our energy problems and climate change. Sounds great when you first hear it, until you look at the theory, how much it would cost, how much it would generate in electricity with the panels being sub-optimal laid flat instead of angled as roads don't tend to work as well for motorists at an angle and see it tried out in reality and suddenly realise that it simply will not and does not work. It's likely going to be fracking, more ways to get natural gas and nuclear. And that will put him at odds with the environmental lobbyists and his wife. And we also have to become self-sufficient and prepared for volatility in energy.

Political grandstanding, ideology and short term thinking are all contributors to the mess we are in now.

tghe-retford

spot1034 said:

Another big rise today. This cannot go on, but in the short term I reckon there must be some smaller suppliers who thought they might be able to ride this out who are now wondering if they can survive if they have customers who opt for the SVT at the end of their present fix. 

Netherlands and UK futures at 25% and 28% from the start of trading today respectively. Breaching the £3 per therm level for the first time in history. I agree, this can not go on but we know Boris will just bang on about climate change, "build back better" and appeasing the environmental crowd whilst turning the other cheek at the people who actually pay the energy bills.

ETA: Make that £4 a therm now for contracts to November. Looking increasingly likely that this is the market telling industry to shut down production as there is not enough supply to go around. We're looking at a legitimate winter of discontent.

Leon_W

Intraday Gas Futures.....

https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5188706

Change the view to 1 year and that just looks scary !

Ant555

Leon_W said:

Intraday Gas Futures.....

https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5188706

Change the view to 1 year and that just looks scary !

I admit having very little idea what that graph actually means but the numerical value for 'WINTER 22' (128.50) is about a third of what it is today (368.50) so does that mean wholesalers can pre-book next years gas at a price roughly 3 times lower than today?

chewyluis

Ultrasonic said:

Wb90 said:

@chewyluis

That would only help those that are eligible for UC and even that £20 doesn’t come close to touching the hikes we’re currently looking at. 

I was on the SVR and my DD was about to jump £50 a month.

Bear in mind that the £20 figure was per week, not per month, so actually it did cover the example change you've quoted. Of course it being per week means the reduction is more significant.

That's part of the problem, people keep hearing £20 in the media and question why all the fuss over that? It works out at about £85.75 over a month which is a seismic cut for anyone dependent on UC.

Now the UC increase that has just been removed from everyone today was clearly stated to be temporary, but cutting now in the middle of an energy crisis, food crisis, and an escalating cost-of-living crisis, smacks of absolute cruelty. I never thought I'd look at Iain Duncan Smith as the voice of reason, but he is totally right about this. Now is not the time for a savage cut like this. Look at it in the spring when can you offset some of the cut against the usual below inflation increase in April. Let's get the poorest people through winter first FGS.

chewyluis

Ant555 said:

Leon_W said:

Intraday Gas Futures.....

https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5188706

Change the view to 1 year and that just looks scary !

I admit having very little idea what that graph actually means but the numerical value for 'WINTER 22' (128.50) is about a third of what it is today (368.50) so does that mean wholesalers can pre-book next years gas at a price roughly 3 times lower than today?

Yes you can buy in at lower prices years ahead. But with all these failing energy suppliers, I imagine bigger suppliers are having to buy a heck of a lot more than they'd want right now at these current higher prices because they have insufficient hedging to cover all the new customers they are bringing onto their books.

With the energy cap, this means they are losing more and more money every week. Losses that will be passed onto all of us next year when our existing fixes end, or when the next energy cap is recalculated for those on variable. The government has basically decided we will ALL pay for these market failures on our future bills.

tghe-retford

Another news flash on my computer. UK gas prices rose by 40% and predictions of a cold, lower wind winter across Europe are driving prices up (certainly not the case last night!). The price per therm has dipped below £4 for now at least.

Wb90

Right you are sorry I thought the UC thing was £20/month.

I can’t see how the cost could possibly be passed on to the customers. There is no way too many households are going to afford these substantial increases. Just meeting the current prices is unviable let alone recovering the mammoth losses the industry is almost certainly going to face over the coming winter.

Something is going to have to give. Renewables and nuclear and heat pumps may well be the way forward but in time for next April or October?