The Economist reports that spot gas prices have fallen but that UK energy prices cannot because the energy companies have already agreed a price; this is known as a forward rate agreement.
Someone is making a shit load of money here because there is a secondary market consisting of options and CFDs. So either the Gas providers or the derivative market makers are making a lot of money beyond the excessive profits of the energy companies. The use of FRAs is, it would seem, is a poor decision. Maybe if OFGEM didn’t nod through the price increases requested by, the so-called energy companies, most are commercial billing entities, they would be more careful.
I recommend you look at the article as it references another article on the UK Energy Market.
Originally published at https://davelevy.info on May 23, 2022.
