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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

#231

Post by oezi »

parkingrift wrote: post #190
Moissanite wrote: post #139

Earlier quoted context omitted.

20/20 hindsight. In a less miserable timeline, the absence of hostilities with Russia makes gas storage a non-issue, and any government putting money into gas tanks rather than renewable energy would have been (rightly) lambasted. I'm willing to tear chunks out of our inept leaders over many things, but this isn't one of them.

My friend… Russia invaded Ukraine in 2014. Two different US presidents warned Europe about Russian energy dependency, publicly. Who knows how many times this was brought up in private conversations. This was so easy to predict that even Donald Trump managed to put two and two together and make four. He brought it up, publicly, and German leaders literally laughed at his face. European politicians deserve no benefit o…

Germany gets a lot of flak for buying Russian gas cheaply the last 30 years in ever increasing volumes. But it seems strange to argue that Germany just should have bought gas from Qatar or the US for double the price from the start.

How should Germany have done that? Import tax on Russian gas? Laws preventing importing cheap gas from the east? Sounds a bit aggressive towards our big neighbor to the east.

Germans maybe were naive to think (up to until this summer) that Russia would need the money as much as we needed the gas. Still from the grand scheme of things (fossil fuels need to end anyway, gas is better than coal for climate, trade is better than no trade) the idea to partner with Russia made a lot of sense.

Europe benefitted from cheap gas over the last decades and it will be somewhat affected by higher prices for this and next year, but it will accelerate the transition to renewables and strengthen nuclear in those countries in Europe where it is still an option. In the end it will push Europe in the right direction.

Re: Mild autumn weather has sent European gas prices plummeting

#232

Post by hdjjhhvvhga »

kube-system wrote: post #207
dariusj18 wrote: post #125

Earlier quoted context omitted.

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.

What do you mean? Ukraine produces a lot of gas and also receives gas from the EU via the eastern flow of the Yamal pipeline:

https://en.wikipedia.org/wiki/Natural_gas_in_Ukraine

Re: Mild autumn weather has sent European gas prices plummeting

#233

Post by bombcar »

thorin wrote: post #188
bombcar wrote: post #135

Earlier quoted context omitted.

Isn't storage just exactly the problem? From what I understand every single possible storage tank in Europe is filled to the brim, and most if not all of the LNG ships are already there or en-route.

I wrote the system for National Grid UK LNG storage and trading in the early 2000s. I think they had 6 sites online now. Milford Haven was in progress I believe. Then they gradually started closing them as not required... Same with coal and nuclear plants! LNG is not so easy to store and there were a lot of safety regulations for site visits.

That's always the problem - most obvious in companies but also visible with governments - anything that is for "once in a lifetime emergencies" gets ignored or downsized eventually because it's hard to explain the reasons for the costs.

Re: Mild autumn weather has sent European gas prices plummeting

#234

Post by pessimizer »

algoatecorn wrote: post #181
guerrilla wrote: post #175

Earlier quoted context omitted.

Your friend is right. They literally have record-breaking income right now[1]. It just headlined the FT two days ago. This is also happening with distributors/utilities. 1. https://www.ft.com/content/0d84255c-84ba-4462-b80a-859335285...

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…

This is just a Gish Gallop. If you're not going to write a thesis, just find a single thing and explain why record profits there aren't actually gouging.

Re: Mild autumn weather has sent European gas prices plummeting

#235

Post by m000 »

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.

> if a company makes too much profit, it's being potentially inefficient

That's the theory. Reality: if a company makes too much profit, it's probably a monopoly or have formed a cartel with their "competitors".

Re: Mild autumn weather has sent European gas prices plummeting

#236

Post by antod »

regnull wrote: post #219
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…

Yeah, the Crimea annexation was dodgy as hell but as you say more ambiguous. The population had enough imported Russians (and "exported" Tartars) that they could run bullshit referenda and claim the people wanted annexation.

The reason the 2022 invasion (compared to Crimea) got the backlash it did from most of the world is that it was so unambiguously clear cut and telegraphed in advance despite Russia's denials they would invade. Russia left no room for its usual grey area bullshit to work for them. It seemed about as unambiguous as Poland in 1939 vs eg the murkier annexation of Austria in 1938.

Re: Mild autumn weather has sent European gas prices plummeting

#237

Post by wcoenen »

2Gkashmiri wrote: post #200
nurblieh wrote: post #151

Earlier quoted context omitted.

Contango! Great word. For a fun explanation, check out Planet Money’s “Negative Oil”, https://www.npr.org/2020/04/22/842095406/episode-993-negativ... .

I was on hn when that happened last time. I felt like but could not convince someone to "buy" me an oil tanker for negative money, only for a short period but I could boast about "being an owner of an oil tanker once". Sigh. If only someone could help

It was the value of the contracts for delivery at a certain time and place (e.g. the "May 2020 WTI crude" contracts) that went negative, because there was no capacity to accept delivery.

Sure you could have received money by buying the (undeliverable) oil on a tanker, but then you would have been stuck paying the oil tanker lease cost (tens of thousands of USD/day) until capacity to take delivery became available, or until the tanker could be moved elsewhere with capacity.

Re: Mild autumn weather has sent European gas prices plummeting

#238

Post by efishnc »

thorin wrote: post #188
bombcar wrote: post #135

Earlier quoted context omitted.

Isn't storage just exactly the problem? From what I understand every single possible storage tank in Europe is filled to the brim, and most if not all of the LNG ships are already there or en-route.

I wrote the system for National Grid UK LNG storage and trading in the early 2000s. I think they had 6 sites online now. Milford Haven was in progress I believe. Then they gradually started closing them as not required... Same with coal and nuclear plants! LNG is not so easy to store and there were a lot of safety regulations for site visits.

That sounds like fun work! How did you get in that position?

Re: Mild autumn weather has sent European gas prices plummeting

#239

Post by kube-system »

hdjjhhvvhga wrote: post #232
kube-system wrote: post #207

Earlier quoted context omitted.

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

What do you mean? Ukraine produces a lot of gas and also receives gas from the EU via the eastern flow of the Yamal pipeline: https://en.wikipedia.org/wiki/Natural_gas_in_Ukraine

A lot of the replacement for Russian gas has been LNG imports. Ukraine doesn't have an LNG port as far as I'm aware, and if they did, I doubt it would be easy to get a ship safely there at the moment.

Re: Mild autumn weather has sent European gas prices plummeting

#240

Post by tacker2000 »

guerrilla wrote: post #228
benj111 wrote: post #215

Earlier quoted context omitted.

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?

> Have you got figures to back up your assertions that the entire supply chain is price gouging? This a false dichotomy. It's been in the news here pretty much constantly, especially in the financial press, to the point it's common knowledge. I'm neither digging up those articles nor translating them for you though. You'll just have to take my word on it (or not.)

So you are not going to substantiate your claim and just say its “common knowledge” and “take my word”? Alright then.
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