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Profiting from the European gas crisis

Our award winning small-cap stock picking expert has been keeping an eye on the forward energy price curve for good reason.
Profiting from the European gas crisis

I have been keeping a keen eye on UK forward energy prices with a view to hedging out our household consumption over the next 12 months, and well before Ofgem drops the bombshell of the autumn price cap on Friday, 26 August 2022. I made the switch this week, locking into a gas price of 11.27p per kwh and 41.5p per kwh electricity price with my supplier Octopus Energy, both of which are above Ofgem’s summer 2022 price cap of 7.32p and 29.5p per kwh, respectively

However, the fixed gas price I signed up to is likely to be at least 11 per cent below the new price cap for the final quarter of 2022 when I switch my heating back on, and safeguards my bills against the real possibility of wholesale gas prices spiralling in the event of Russia significantly cutting supplies to Europe. If that happens then Ofgem’s gas price cap for the first quarter of 2023 (to be announced on 24 November 2022) will easily exceed 13p per kwh, and would impact the electricity price cap, too, given that gas generation accounts for more than a third of the National Grid’s output. There is another reason for my interest, too.

 

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