Thread: Gas Prices
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Old November 18th 05, 08:40 PM posted to uk.sci.weather
John Hall John Hall is offline
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Default Gas Prices

In article .com,
Ian Waddell writes:
I understand where you're all coming from - but this is the wholesale
gas price increasing. The price is dictated in the same way as oil -
i.e. by the traders in London (and elsewhere) buying and selling
options on the exchanges.

Now, these people do get things wrong, but generally the movement of
these prices (driven by supply & demand) is due to the data they use in
making their decisions. That is, if wholesale gas prices don't
actually climb in the coming months, these traders lose a lot of money.
So, they must have reason to believe that the price will increase, to
buy this many options in a week and force the market prices up.

This could be due to a couple of things:

1. Data from the supplier stating they plan to increase prices this
winter (without any reference to demand for the stuff)
2. An expectation that consumer demand will soar (cold winter?) forcing
prices up

So, it could just be a scam to prepare us for bad news - or an
announcement of some kind energy policy, but for the
government/energy companies to somehow force prices up themselves, is
slightly too hard to believe.


In view of #2, could the Met Office's warning of the likelihood of the
coldest winter since 1995-6, and the subsequent exaggeration of that by
the media, be largely responsible? If so, it's rather unfortunate.
--
John Hall
"Sir, I have found you an argument;
but I am not obliged to find you an understanding."
Dr Samuel Johnson (1709-1784)