The wholesale gas market sees the purchase and sale of energy products - electricity and natural gas – by energy producers and energy retailers.
The UK produces up to 90% of the gas it needs in North Sea oil fields and once it is piped ashore, wholesalers buy gas under long-term contracts before selling it on to power the electricity network and to domestic gas retailers such as British Gas.
The remaining 10% of the gas we use is imported by pipeline from Norway and Russia. Qatar has recently begun shipping liquefied gas to the UK in supertankers, each of which holds enough to power the entire country for eight days.
There are two prices for wholesale gas. The spot price is for gas for next day use, while the forward market is for gas that will be supplied at a set future date. Traders can currently buy supplies on the forward market for the next two winters.
The long-term deals were until recently linked to the price of oil but a gas “market” where buyers and sellers can come to trade has been developed in Britain.
This market is estimated by the Financial Services Authority to be worth around £300bn (€374bn) a year.
The wholesale gas market has more than 50 participants, not just energy supply companies, handling hundreds of trades every day.
Some gas is bought and sold on the Intercontinental Exchange (ICE) in London or Nymex in New York but most deals are now done “over the counter” (OTC), that is, between two parties on whatever terms they agree.
In order to participate in this type of trading, shippers must sign up for a licence with energy regulator Ofgem.
These trades can be done directly or using a broker such as Icap or Spectron, or using electronic trading platforms provided by firms such as Trayport.
However, looking up the true value of gas contracts in the OTC market is much harder than looking up a share price for a publicly listed company, for example.
The price can be accessed by subscribing to data from a small number of specialist agencies which make a calculation but using limited evidence.
Many long-term deals are based on the prices set by these price-reporting agencies (PRAs), which include ICIS Heren, where Seth Freedman, the whistleblower who brought allegations of price-fixing to light, worked.
Mr Freedman told The Guardian that there are limited ways for price reporters to check the prices for deals they are given and they are often pressured afterwards to “correct” their numbers.
The prices are key to the PRA’s continued importance in the marketplace.
The UK gas market is the benchmark for most of the gas traded across Europe, with prices at major European hubs usually following the daily lead of the UK market.
Commodity markets have been dogged for years by accusations of price-fixing by the dominant producers, suppliers and traders in the marketplace.
Last week, Barclays bank was accused of rigging the US power markets. It faces a record 470 million US dollar (€362m) fine.
The regulator, the US Federal Energy Regulatory Commission released emails from Barclays traders who boasted to have “propped up the Palo index” and planned to “crap on the NP light”. Barclays denies the claims.