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Mild autumn weather has sent European gas prices plummeting

economist.com

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Re: Mild autumn weather has sent European gas prices plummeting

#201

Post by Tarsul »

somedude895 wrote: post #182
kristo wrote: post #165

Don't discount the fact that many europeans are actively trying to conserve and refuse to heat their house until absolutely necessary. I have 65 yr old friends in amsterdam taking spongebaths because they don't want to support russia

Is that just an anecdote though? In Switzerland the govt has been running an energy conservation awareness campaign for about 6 weeks now and the stats say it's had zero effect so far.

I think it helps but it's hard to measure as long as the outside temparatures are not comparable to last years. I follow the diagrams for Germany and right now consumers use about 30% less than the average of 2018-2021[1]. I think many people reduce their heating not just to help Ukraine etc. but also because they (we) know that it's way too expensive and we certainly weren't looking for much cost savings before. I thought I did last year (remember: already 2021 there was news that russia was not delivering as much gas as they usually do) but I'm actually on track to use like 50% less than last year. But yeah, thats just anecdata.

[1]https://www.spiegel.de/wirtschaft/erdgas-versorgung-europas-...

Re: Mild autumn weather has sent European gas prices plummeting

#202

Post by gorkish »

guerrilla wrote: post #174
netrus wrote: post #133

Earlier quoted context omitted.

The argument is that it is obviously never easy to make money in a transparent market - because SOMEONE with money would do it until the prices adapt. The difference between todays spot market and futures tells you something about the challenge to provide additional storage at scale.

> because SOMEONE with money would do it until the prices adapt But they are. Your premise is wrong. This just headlined the Financial times 2 days ago[1]. This and the last quarter have been record profits for energy companies and that's not even counting local profits, which are also at record heights. 1. https://www.ft.com/content/0d84255c-84ba-4462-b80a-859335285...

Someone at some point is gonna have to start defining what the hell "record profits" actually means and why it's good for some companies to make "record profits" out of nothing but hype and bad for other companies to make "record profits" because they were smart about holding their previously money-losing gas investments until a more favorable economic condition.

Gas is still trading worldwide at a price far below it's 6:1 energy value relative to oil, so IMO everyone needs to stuff this "record profits" line right back up their ass where they got it in the first place. There's not a gas shortage; gas is still overproduced and dirt cheap. We do however seem to be long on crybabies that can't buy it at 20:1 anymore.

Financially and politically punishing domestic producers in Europe and the West led to this problem in the first place where it's simply not possible to be price competitive with Russia and the Middle East where the labor, environmental and regulatory standards to produce it are weak or ignored. Nobody seems to give one shit about how much "profit" those suppliers make from the sales, consequences be damned, so long as they give the best price.

Re: Mild autumn weather has sent European gas prices plummeting

#203

Post by reitanqild »

snapcaster wrote: post #170
reitanqild wrote: post #140

Earlier quoted context omitted.

(Disclaimer up front: I don't know who cut NS1 and NS2, my bet is on russia, but I can see more than one alternative.) Which would explain the attacks on their own gas pipeline NS1 and NS2: - they are dumb and reckless enough to do that (they weren't used anyway, +plausible deniability) - it signals to NATO the idea that russia can destroy critical infrastructure without actually getting caught for an attack on criti…

Why would it have been Russia? Obviously we don't know who did, but my thoughts were that Russia would want that pipeline to be available as a bargaining chip to get the rest of Europe to pressure Ukraine to concede. How does blowing it up benefit them?

> Why would it have been Russia? Obviously we don't know who did,

Agree. As mentioned above I keep multiple options open.

> but my thoughts were that Russia would want that pipeline to be available as a bargaining chip to get the rest of Europe to pressure Ukraine to concede. How does blowing it up benefit them?

Exactly as I outlined above: if they did it, it is (relatively) cheap power signaling: “think if this happened to one of the cables that are in use. We are actually dumb & crazy enough & technically capable to pull it off”.

Re: Mild autumn weather has sent European gas prices plummeting

#204

Post by MomoXenosaga »

actionfromafar wrote: post #109
pavlov wrote: post #58

Earlier quoted context omitted.

Selling more gas to Europe isn’t a massive windfall to USA. The Biden administration has bigger fish to fry and wouldn’t risk such an intervention in Swedish waters just as Sweden is joining NATO. My money is on Russian hardliner factions operating rogue without Putin’s approval. He can’t admit he doesn’t know who did it. The Russian state security apparatus is so large, we have no idea what kind of internal tensions…

My money is on Putin doing it, to dissuade any would be throne-pretenders in case of a coup. Any new government has fewer funding options, which would be good to negotiate with Europe, and to pay cooperating oligarchs. It would be cutting the nose to spite the face, except Putin is cutting Russia's nose, not his own. What matters is staying in power, not the good of the nation.

I agree. Scorched earth policy. Putin for whatever reason is going all in on Ukraine. Even if the war ended tomorrow it would take Russia decades to rebuild it's army.

Re: Mild autumn weather has sent European gas prices plummeting

#205

Post by slim »

somedude895 wrote: post #182
kristo wrote: post #165

Don't discount the fact that many europeans are actively trying to conserve and refuse to heat their house until absolutely necessary. I have 65 yr old friends in amsterdam taking spongebaths because they don't want to support russia

Is that just an anecdote though? In Switzerland the govt has been running an energy conservation awareness campaign for about 6 weeks now and the stats say it's had zero effect so far.

Maybe it has an effect but not the one you expect (it makes people hate Russians)

Re: Mild autumn weather has sent European gas prices plummeting

#206

Post by [deleted] »

acdha wrote: post #120
sph wrote: post #113

Earlier quoted context omitted.

I am ambivalent on the idea of a completely free market. Because while I believe it would self-regulate, in a vacuum (or anarchic system), a free market paired with a government means interference, nepotism, laws that favour monopolies and kills competition. So when people like Liz Truss enter 10 Downing Street and claim they want to enact "free market policies", the result is just utter economic upheaval and chaos t…

Monopolies and collusion happen without government regulation, too. I find it best to think of markets as something which are free in the same sense that a helicopter is not currently crashing into the ground.

[deleted]

Re: Mild autumn weather has sent European gas prices plummeting

#207

Post by kube-system »

dariusj18 wrote: post #125
hdjjhhvvhga wrote: post #83

Earlier quoted context omitted.

Do you mean this one: https://agsi.gie.eu/ ?

Ukraine seems to be the odd one out, this is not a surprise of course, but it could at least be good, they have the opportunity to buy the gas at the bargain rates.

Ukraine's reserves are probably that way because there's no way to get the gas there, no matter what the price is.

Re: Mild autumn weather has sent European gas prices plummeting

#208

Post by OkayPhysicist »

MichaelZuo wrote: post #112
m000 wrote: post #110

Earlier quoted context omitted.

No, consumers just expect it to show consistent reaction times. A rumour is typically enough to warrant an overnight price hike in consumer prices. While for experiencing reductions, consumers have to wait for a few months for the market to "adapt". And in the end, it usually is the consumers that adapt to the increased prices, so companies don't see any good reason to reduce them.

That is how the market works? Look at any stock in any stock market that had a highly positive or negative rumour associated. You will see an immediate spike or dip in value and, a slow regression to the mean.

You missed what they said: the problem is that consumer prices are not symmetric like that: prices spike, and then regress, but they never sharply dip.

Re: Mild autumn weather has sent European gas prices plummeting

#209

Post by oezi »

Tarsul wrote: post #201
somedude895 wrote: post #182

Earlier quoted context omitted.

Is that just an anecdote though? In Switzerland the govt has been running an energy conservation awareness campaign for about 6 weeks now and the stats say it's had zero effect so far.

I think it helps but it's hard to measure as long as the outside temparatures are not comparable to last years. I follow the diagrams for Germany and right now consumers use about 30% less than the average of 2018-2021[1]. I think many people reduce their heating not just to help Ukraine etc. but also because they (we) know that it's way too expensive and we certainly weren't looking for much cost savings before. I t…

Many German newspapers have data visualization on the topic:

Frankfurter Allgemeine:

https://m.faz.net/aktuell/wirtschaft/zahlen-zu-strom-und-gas...

Zeit Online:

https://www.zeit.de/wirtschaft/energiemonitor-deutschland-ga...

It seems clear to me that German are trying to save energy both in private households and in industry. This seem quite reasonable given that gas prices for many end customers are double of last year's prices.

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