Tricks of the trade Jillian Ambrose

“Traders are facing the weakest prices in half a decade”

It’s official: energy markets really are as fickle as the weather.

This time last year, after a bleak and very long winter, the UK’s gas and power markets were on the brink of some of the most expensive summertime trading levels seen since the global recession. But just as suddenly traders are now faced with some of the weakest market prices in almost half a decade due to the most recent mild (though very wet) winter season.

The only thing shifting quicker than market sentiment is the public’s idea of how it should affect them.

It wasn’t so long ago that consumers, press and politicians alike welcomed the idea of a price freeze on retail bills, shrugging off energy company concerns that such an intervention would leave them no room to manage unexpected market volatility.

Consumer groups laughed off the idea that a price freeze could hurt the big six saying “But they hedge two years in advance!”. Now, after just two months of historically low prices the same groups are baying for retail price cuts.

I’d be first in line to say that retail prices should fairly reflect market conditions. But that’s the point: if last year you argued against a retail price which could rise as wholesale prices do, then how could you demand that it keep pace with weaker markets this year?

Energy companies, apparently, are expected to shoulder market fluctuations indefinitely – unless those fluctuations suit us, as consumers. Then we’re all pro-market.