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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
I agree excellent question, especially since he mentions equipment and not labor.
@Symple I think you make a lot of interesting points. Obviously the breaking point in the current energy crisis is the Ukraine War and the resulting drop in Russian Gas Supplies (and to a lesser Oil) but I do believe European and US energy policies for the last decade+ have greatly magnified the problem. Large projects like finding new wells and drilling them, building long distance pipelines and/or refineries have very long lead times. For example Nord Stream 2 was initially evaluated back in 2011 but wasn't completed until recently. So what our politicians are saying today, often has very little impact in the short term, but could have a large impact in the longer term. An obvious (non-current, non-politically sensitive) example is the 2008 Global Financial Crises which obviously had its roots in the US housing market. This had nothing to do with President Bush. In fact I don't think there is anything Bush could have done to prevent it. That crisis was building for decades, it just happened to peak while he was President. Doesn't change the fact that it put the US into recession and Bush was voted out (aka blamed?) though.
As you say these issues are very complex, far more complex than our politicians and media would have you believe. On a slight tangent, everybody is quick to blame all sorts of reasons for the current cost of Gasoline and Diesel. Something that doesn't get much attention though is the impact China is having. These are two images from Platts/S&P Global website showing Chinas export of high end petroleum products. Exports are down 10 million tonnes from last year and even more since 2020. I believe these numbers are monthly so 10 million tonnes = 65 million barrels = 2.15 Million Barrels Day. That's equivalent to almost 2.5% of world crude oil production per day!
This is what the object of contention looks like. A technical marvel that drives the EU and especially the Germans to despair. (Gas turbine from Gazprom)
The following picture shows how strongly or how weakly the pipeline NST 1 is utilized. At the moment the level is 47%. From 27 July 2022 it will be only max.20% for the time being.
Reason for this decline according to Gazprom: Gazprom unexpectedly announced it would halt one more Nord Stream turbine at its Portovaya compressor station from July 27, “taking into account the technical conditions of the engine,” the Russian company says in a statement.
This means that as had been whispered much of last week, gas flows from Portovaya will drop to as much as 33 million cubic meters per day from 7am Moscow time on July 27, which means flows along NS1 will decline by half, from 40% of capacity to just 20%.
Reaction of specific markets to this absolute new news from Russia:
How a Russian Gas Freeze Would/Could Curtail European GDPs
According to the IMF, a complete shut-off from the Russian side would have disastrous effects for European economies. Twelve months after a total freeze, the organization estimates that some countries could lose several percentage points of GDP output. Some Central European countries – Hungary, the Czech Republic and Slovakia – as well as Italy would be hit hardest. In a worst-case scenario where the continent does not achieve fast LNG integration, experiences many adjustment problems and decides to protect private households, not just industries, from gas shortages, between five and six percentage points could be shaved off GDP output in these countries. Germany and Poland would fare slightly better at losses between two and three percentage points in this scenario.
As natural gas is used widely in Europe to supply heat and hot water in private homes, tensions have been running high over who should take priority in case of a pressing gas shortage in the coming winter.
Even for European countries which are not using Russian gas, spillover effects could mean up to 0.8 percent shaved off GDP should one of the IMF worse-case scenarios befall the continent. This includes the UK, Ireland, Portugal, Belgium and Croatia. As more and more countries are attempting a swift switch to LNG, problems of EU market integration could likewise mean losses for non-dependent countries. They could be about equal in size in the UK and Ireland and up to 2.2 percent in Croatia.
I could write here in this thread permanently and put in every day something new. Only I have only a certain time to do so and willing to even do so. In general, and I can prove this: It is all about political ideology and wiliness that this what happens in the energies market is wanted in the EU and even in the US.
To shorten all, this guy and his friend do very well analyses day by day on different topics, and this analyses do top what the MM is shouting out as true fake news day by day.
Of course: It is still your choice to make your own mind, and specially your fundamental trading decisions on such information. As longer as you follow even such sources, as more you will get an idea how miss information on the MM works.
US NatGas Hits 14-Year-High, EU Benchmarks Explode Higher
US natural gas futures surged to a new 14-year high this morning as European prices spiked on Russia’s move to shut a major pipeline (for "planned maintenance"), sparking increased fears that demand for American exports of the heating and power-plant fuel will soar when Freeport's LNG Terminal comes back online in October.
In Europe, benchmark gas futures rose as much as 20% to new record highs...
...driving electricity prices to fresh records, topping EUR700/mWh for the first time ever...
I comment only briefly, very briefly on what is happening here right now: Now it is becoming very clear and tangible for every normal citizen in his own wallet what this policy of sanctions and green ideology in the West means for their citizens.
Then only the question remains open: When will people wake up from their deep sleep? And yes, cold, specially in the night, helps to wake up.
Once again, it has been necessary to delete one of your posts because it contains politics.
We can understand that you believe in and care about your point of view, and that is generally a good thing, but in this case, it would be a good thing somewhere else, not on futures.io.
You have made many entertaining contributions that have lightened people's days and made them smile, and you have also made investing and trading comments that have added value to the forum.
But you will have to stop bringing in your opinions on political matters. If we allowed politics, then soon this forum would be filled with arguments that have no value or place in a trading forum.
So, while we respect your right to have any political opinion you wish, please do not continue to post anything of a political nature here.
Thanks.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Gazprom "Completely Halts" Nord Stream Indefinitely Due To "Unexpected" Leak
After a 3-day halt, Russian energy giant Gazprom was expected to resume critical supplies of nat gas to Europe via Nord Stream 1 tomorrow, but it appears that Putin who is enjoying the game of cat and mouse a little too much, had other plans and as a result, Russian gas flows toward Europe won't be coming back any time soon, as moments ago Gazprom announced that it had "completely halted" transport of gas to Nord Stream until a previously undetected oil leakage is rectified.
Europe Is Facing Energy Disaster And It’s Going To Bleed Over Into The US
Though the situation is ever changing, currently the Russian government has announced an official shutdown of ALL natural gas exports to Europe through the Nord Stream 1 pipeline and plans to maintain the shutdown until the EU ends its economic sanctions over the war in Ukraine. This means that around 40% of Europe’s energy resources are now gone, with supply chain issues surrounding the other 60% and prices skyrocketing for households and businesses.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
At some point demand destruction will become a major factor, but while demand destruction may reduce the energy needs it will be disastrous for economies.
