Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Europe now has so much natural gas that prices just dipped below zero

lite.cnn.com

Post reply on HN
Print view View original

131–140 of 197 posts

Re: Europe now has so much natural gas that prices just dipped below zero

#131

Post by bluGill »

Ancapistani wrote: post #26
Silverback_VII wrote: post #21

Earlier quoted context omitted.

>LNG industry can keep pace and replace Russia for good. Nobody can replace Russia and their resources in the long-term.

“long term” is doing a lot of work in that sentence. It seems clear that what we’re doing right now can sustain things until spring. If we’re willing to pay to do it again next year, and the year after that… at some point it’s going to be financially viable to change the makeup of both energy sources and how it’s consumed.

>at some point it’s going to be financially viable to change the makeup of both energy sources and how it’s consumed

Last spring - which is why heat pumps became very popular in Europe over summer. Things will change even more in the future, though I'm not sure how much.

Re: Europe now has so much natural gas that prices just dipped below zero

#132

Post by thaumasiotes »

throwaway4aday wrote: post #104
dr_faustus wrote: post #31

I really don't understand the doom and gloom wrt next year. What was obviously completely underestimated was the elasticity of consumer demand for gas. In Germany, consumers are using 25% less gas even if you account for the weather. So with increased supply from Netherlands and Norway, even a limited amount of LNG will probably be enough to fill the storage again and compensate the missing Russian gas (which account…

> a bearable (albeit not overly comfortable) 19 degrees celsius Interesting to see what temp other people keep their homes at. Our normal indoor temp is 19 and I sometimes find that too warm.

I would generally want 21 or 22.

Re: Europe now has so much natural gas that prices just dipped below zero

#133

Post by thaumasiotes »

dom96 wrote: post #119
throwaway4aday wrote: post #104

Earlier quoted context omitted.

> a bearable (albeit not overly comfortable) 19 degrees celsius Interesting to see what temp other people keep their homes at. Our normal indoor temp is 19 and I sometimes find that too warm.

Temperature isn't the full story, what you really want is the combination of temperature and humidity, i.e. the heat index.

Temperature pretty much is the full story indoors. If you live in an area with 80%+ humidity outdoors, you make sure that isn't true indoors.

Re: Europe now has so much natural gas that prices just dipped below zero

#134

Post by ShivShankaran »

asdajksah2123 wrote: post #111
vagrantJin wrote: post #91

Earlier quoted context omitted.

> If someone had predicted Europe would have the LNG supply they do today at the beginning of the war they would have been dismissed as a utopist. Not really. It was always a matter of cost. Losing 30% of gas supply is no laughing matter - and the shock will naturally push governments to willingness to pay above premium prices to stabilize supply.

Europe can't just "pay above premium prices" to replace Russian gas. It would have been physically impossible to replace the Russian gas (and it still is physically impossible to fully replace Russian gas within 2022) without creating a tremendous amount of infrastructure around getting LNG, which European countries have been incredibly successful at doing so. The progress they've made in creating that infrastructure…

No post body was provided.

Re: Europe now has so much natural gas that prices just dipped below zero

#135

Post by boilerupnc »

chinchilla2020 wrote: post #75
csours wrote: post #12

You have different markets essentially - there is a market for delivery, and a futures market. The market for delivery briefly went price negative. This is dominated by what is in the pipeline right now and what volume of gas is being pulled from the pipeline right now. The futures market is still positive. This market is served by LNG and gas that is still in the ground. The price here is dominated by risks. --- The…

I try to explain this to people all the time with respect to gasoline prices in the US. People thing it has to do with the 'oil companies', but crude producers are hedged into next decade for the most part. Even on the refinery side they are locked in long term contracts with distributors for their products, of which gasoline is a very small piece of the pie.

I listened to a Planet Money podcast [0] last month that was really interesting and helpful (for me at least) to understand the aggregate price breakdown and the different aspects which contribute to the sum (e.g. transport, refinement, drilling, taxes, etc ...) price for a unit of gasoline.

In particular, one portion talks about how tankers aren't beholden to the original manifest when they leave port A to go to port B. Mid voyage, they can suddenly pivot to port C if the spot buying price there is better than port B. And so on and so forth. So, until the tanker reaches a particular port - the market is what dictates which ports the tankers end up gravitating towards dynamically (and probably factoring in current and future weather, spot buying price fluctuations, current proximity, piracy, etc.) Really fascinating stuff and was eye opening for me to realize how truly small the transport cost portion is for the cost of a unit of gasoline.

"Planet Money investigates how exactly gas stations determine how much a gallon is going to cost us, and why those numbers are so volatile."

[0] https://www.npr.org/2022/09/15/1123108797/planet-money-break...

Re: Europe now has so much natural gas that prices just dipped below zero

#136

Post by sebow »

Textbook clickbait article, though I don't expect (nor want) the title to be changed or the link to be removed because it shows how desperate CNN is for coming back into the mainstream.

The prices are not "zero" or "below zero". Maybe for the companies that buy gas in order to resell it to the average consumer, but the normal consumer does not get it for free or gets paid to burn gas randomly.This is what a layman understands when s/he reads the title, which is factually incorrect as per others have already explained in this thread.

On another note, I'm even skeptical to believe the gas storage across Europe is full. Because if that was the case, the prices should have began to plateau sooner up until now, instead of staying the same/relatively decreasing.

Re: Europe now has so much natural gas that prices just dipped below zero

#137

Post by thaumasiotes »

tuukkah wrote: post #54

It's the same with electricity markets: at times there's so much wind and nuclear power that the spot price goes below zero in Europe as well as in the US: https://www.sciencedirect.com/science/article/pii/S266679242... I still pay around 5 cents/kWh to the middlemen though so consumption hasn't been profitable to me so far.

> at times there's so much wind and nuclear power

Isn't the amount of nuclear power constant?

Re: Europe now has so much natural gas that prices just dipped below zero

#138

Post by matai_kolila »

bluGill wrote: post #124
matai_kolila wrote: post #80

Earlier quoted context omitted.

Can I take a stab? If I just so happen to have decent storage capacity for this gas I could make a killing, except if I did have that storage, I would have already had long term contracts to fill that storage/keep it full given the uncertainty in Ukraine so there's not really any place for this gas to go, but they're still producing the gas and it's hard to just stop doing that so for a little bit the gas companies w…

Almost. If you had long term storage you would be following the market yourself. There is a good chance that you are the one who paid for this gas months ago when it left port, expecting to sell the gas you currently have in storage and refill it with shipments arriving today. So odds are you lost money today. Note that the above was a good and reasonable bet to make. You should have already known the risk that this…

Okay, that makes sense.

Do people in these situations try to come up with on-demand storage at all, or is that not reasonable given the difficulty of storing natural gas?

Like, could you try and load up your idle fleet of containers (truck, ship) on the cheap or are we past that now, hence the negative price?

Re: Europe now has so much natural gas that prices just dipped below zero

#139

Post by tuukkah »

leobg wrote: post #108
tuukkah wrote: post #94

Earlier quoted context omitted.

It might be more practical to invest in solar and wind. I hear solar can be profitable even here in the north.

Unfortunately not in winter though, I think.

Apparently and surprisingly, the biggest issue is not the darkness but cleaning the panels from frost and after snowfall. On the positive side, subzero temperatures increase the photovoltaic efficiency, white snow increases the amount of light hitting the panels, and the demand is highest during the cold, calm and sunny winter weather type. https://www.oulu.fi/en/blogs/science-arctic-attitude/potenti...
Post reply on HN