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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

#211

Post by hackandthink »

vkou wrote: post #162
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…

The cost of betting wrong when you attack your own infrastructure is measured in rubles. The cost of being wrong when you attack NATO infrastructure is measured in war, conventional or nuclear. That's why Russia attacked Ukraine, but only postures and blusters when it comes to NATO. There are red lines that you can't cross, and open conflict with a nuclear adversary is one of the latter.

"There are red lines that you can't cross, and open conflict with a nuclear adversary is one of the latter."

This is true for NATO powers as well. I can't believe Russia blew it up, it doesn't make sense.

But which NATO Country would blow up pipelines and risk a conflict with a nuclear adversary?

Re: Mild autumn weather has sent European gas prices plummeting

#212

Post by benj111 »

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.

Electricity usage in the UK is low compared to last year.

Https://grid.iamkate.com

If you look at past year demand it's currently 28.1gw weekly average v 31.6gw last year so that's a roughly 10% drop.

Re: Mild autumn weather has sent European gas prices plummeting

#213

Post by benj111 »

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...

Why is the premise wrong? Do you not think gas producers are looking to increase production, LNG terminals and shipping?

Re: Mild autumn weather has sent European gas prices plummeting

#214

Post by reitanqild »

hackandthink wrote: post #211
vkou wrote: post #162

Earlier quoted context omitted.

The cost of betting wrong when you attack your own infrastructure is measured in rubles. The cost of being wrong when you attack NATO infrastructure is measured in war, conventional or nuclear. That's why Russia attacked Ukraine, but only postures and blusters when it comes to NATO. There are red lines that you can't cross, and open conflict with a nuclear adversary is one of the latter.

"There are red lines that you can't cross, and open conflict with a nuclear adversary is one of the latter." This is true for NATO powers as well. I can't believe Russia blew it up, it doesn't make sense. But which NATO Country would blow up pipelines and risk a conflict with a nuclear adversary?

> I can't believe Russia blew it up, it doesn't make sense.

I think lot of what Russia does, doesn’t make sense at the macro scale, only in the context of internal power struggles.

Re: Mild autumn weather has sent European gas prices plummeting

#215

Post by benj111 »

guerrilla wrote: post #187
algoatecorn wrote: post #181

Earlier quoted context omitted.

That doesn't mean they are right. This is a complex topic that I don't have time to write a thesis on at the moment. Some things to consider: cost cutting 2014-2019 enabled much higher profits when demand went through the roof, alternatives and substitutes, how is the price of OIL determined?, spot vs future, refinery capacity, how much of oil -> gasoline is vertically integrated, who oil producers sell to, who buys…

> So who's doing the price gouging? Oil producers? Distillers? Gas stations? Everyone? Yes, the entire supply chain, at least in my country. It's been news for quite a while. > Are prices being gouged, Yes and there's a lot of talk of intervention for that reason, even in the US.

Have you got figures to back up your assertions that the entire supply chain is price gouging?

Or is this purely on the basis that you're experiencing high prices so anyone that passes on those price rises are defacto price gouging?

Re: Mild autumn weather has sent European gas prices plummeting

#216

Post by stevehawk »

MomoXenosaga wrote: post #198
csours wrote: post #193

Earlier quoted context omitted.

When did WWII start? It depends on where you lived. In 2014 they had a fig leaf of not using uniformed Russian military. It was a transparent fig leaf, but we all need our fictions to get through the day.

Yeah Crimea invasion was basically Sudetenland. Nobody really thought Putin would become completely unhinged.

Nobody thought Kiev would last past the first 48 hours, least of all Putin.

Re: Mild autumn weather has sent European gas prices plummeting

#217

Post by vkou »

hackandthink wrote: post #211
vkou wrote: post #162

Earlier quoted context omitted.

The cost of betting wrong when you attack your own infrastructure is measured in rubles. The cost of being wrong when you attack NATO infrastructure is measured in war, conventional or nuclear. That's why Russia attacked Ukraine, but only postures and blusters when it comes to NATO. There are red lines that you can't cross, and open conflict with a nuclear adversary is one of the latter.

"There are red lines that you can't cross, and open conflict with a nuclear adversary is one of the latter." This is true for NATO powers as well. I can't believe Russia blew it up, it doesn't make sense. But which NATO Country would blow up pipelines and risk a conflict with a nuclear adversary?

It can make sense if you think about it in the game theory manner. Sometimes, deliberately limiting your options improves your overall outcome.

One theory is that by blowing up the pipeline, Putin is limiting Russia's options. With the pipeline in place, ending the war would immediately cause the flow of gas, and dollars into Russia to resume.

Without the pipeline, ending the war would not cause the flow of gas and dollars.

This might improve his ability to politically maneuver within the country (As other political agents, who care more about money than the war are less incentivized to push for an end to the war.)

It's a similar idea to why the US stations troops around the Korean DMZ. Their job isn't to repel a North Korean invasion, their job is to die in the first few minutes of it, and thus force the US to intervene in any resumed Korean conflict. This very clearly communicates to North Korea how serious the US is about maintaining the status quo. By restricting its freedom of action (Forcing itself to go to war if hostilities resume), the US accomplishes a political objective (preventing hostilities from resuming).

---

Of course, this is all speculation. For all we know[1], the pipeline was blown up by Poland/Ukraine/Germany/the US/the Mossad/Morocco/Aliens.

[1] It's difficult to trust any information about this, as its impossible to impartially verify it, and everyone involved has their own agenda they want to push.

Re: Mild autumn weather has sent European gas prices plummeting

#218

Post by benj111 »

AbrahamParangi wrote: post #126
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's because if a company makes too much profit, it's being potentially inefficient - but if it makes too little profit, it goes out of business.

How is a company inefficient if it makes 'too much' profit?

Whom decides what is too much?

Re: Mild autumn weather has sent European gas prices plummeting

#219

Post by regnull »

GaylordTuring wrote: post #173

> Before Russia invaded Ukraine, it provided close to 40% of Europe’s gas. I’ve never understood why people say things like this when referring to the operations started in 2022. Wasn’t what they did in Crimea in 2014 an invasion?

The Russian annexation of Crimea had at least some ambiguity. Yes, it was illegal, but Crimea used to belong to Russia, it had majority Russian-speakers, and there was no violence on any significant scale during takeover. The question was, if they are taking over your territory, why don't you fight back? The answer is obviously complicated (and for the record I fully support Ukraine, and I think Crimea and all other occupied territories must be returned to Ukraine). Russia has succeeded, to some extent, making it a "one-of" issue. Now, of course, they've completely destroyed their previous position, it turns out Crimea is not special, they basically try to annex any territory they have any sort of control over.

Re: Mild autumn weather has sent European gas prices plummeting

#220

Post by benj111 »

sidewndr46 wrote: post #118
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…

Business people and political leaders in the West are almost universally in favor of the free market. Until it turns out that said free market might mean they get the short end of the stick. That is to say less tax revenue or less profit. When that happens they suddenly insist there must be some of government intervention, otherwise they are too big to fail.

Isn't that like saying people are in favour of free speech. Until someone starts inciting violence.

It's still in favour of free speech, just with limits.

The same applies to free markets. If they work as promised great. If not someone needs to step in and fix it.

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