Breaking: Ed Advised Voters to Freeze High Prices UK Gas Prices Hit Multi-Year Lows on Oversupply

lab-energy

This just in from Reuters newswire will have political repercussions:

LONDON, June 4 (Reuters) – British spot and forward prices for wholesale natural gas fell to multi-year lows on Wednesday as oversupply combined with weak spring demand.

British gas for delivery next winter traded at 59.40 pence per therm in the afternoon, its lowest level since at least the third quarter of 2011, while day-ahead spot gas prices dropped close to four-year lows at 41.50 pence per therm.

“The gas market is completely oversupplied. There’s a lot of gas in storage, a lot of gas in pipelines, a lot of LNG tankers have been coming in and demand is very low because of mild weather, so that’s putting a lot of downward pressure on the market,” one gas trader said.

Why is the UK gas market over-supplied? Because the price was high. Now it will fall. Price signals in a free market balance supply and demand. That is how free markets work…

If however you listened to Ed Miliband, who absorbed Marxist theory literally at his father’s feet, with a belief in a state-directed command economy with prices and rents controlled, you believe in bucking the market. If you followed Ed’s advice last year and froze your gas bill until 2017 you are likely to now be locked into a gas price that will be higher than it will probably be in 2017. Miliband thought he was clever with that price freeze gimmick. Not looking so clever now…




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Quote of the Day

The FT’s Wolfgang Munchau on the “fake maths” of economic forecasts:

“The truth is that our ability to forecast the future beyond the current quarter is limited… The curse of our time is fake maths. Think of it as fake news for numerically literate intellectuals: it is the abuse of statistics and economic models to peddle one’s own political prejudice… The fakeness of the maths lies in an exaggerated inference. Economic models have their uses, as do opinion polls. They provide information to policymakers and markets. But nobody can see through the fog of the future.”

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