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Well, sorta and maybe

Almost 50 tankers full of liquified natural gas (LNG) are waiting for winter off the coast of Europe, after a sharp fall in prices made it less profitable to dock and sell their cargo.
….
If LNG sellers wait to unload until December then they stand to make tens of millions of pounds more in profit per vessel, according to analysts.

There’s a substantial “if” built into that assertion. If prices rise again, only if……

27 thoughts on “Well, sorta and maybe”

  1. Are they throttling supply to drive up price?

    Is this a case of futures setting real prices, because those tankers had futures sold at higher than current spot so it just makes sense to gamble on withholding supply to make prices rise to the futures contract price?

  2. Alternative story.
    Every storage facility is full, the weather is mild, usage is low- hence there’s nowhere to put the stuff.

  3. throttling,
    Care to clarify? I’m not quite following. People aren’t sending LPG to Europe on spec, surely?

  4. RLJ: That’s what I thought as well. Surely with such a huge-value cargo you would set sail when you were contracted to sell it, not speculatively set off on the chance you can sell your trinkets to the natives.

  5. Good job we at the WEF managed to get rid of Liz Truss before the price of gas collapsed and reduced its borrowing significantly eh? The UK might have been stuck with tax cuts it could afford and a chance of ameliorating the coming global recession that we need to cause catastrophic economic collapse so we can step in with our ‘solutions’.

  6. @jgh: not necessarily true. I believe such cargoes are often traded en-route, sometimes more than once, and re-routed too, as demand/supply/price/storage capacity fluctuate in different parts of the world. It’s always been the case; for another example bulk grain cargoes in the early 20th Century, which could and did change ownership several times while sailing between Oz and Europe.

  7. It sounds as if the market has responded to supply and demand by creating an extra, albeit floating, storage capacity for Yurp. Good-oh.

    Could we invite the tankers to earn a few bob by ramming invaders’ boats in the Channel?

  8. I believe such cargoes are often traded en-route, sometimes more than once, and re-routed too, as demand/supply/price/storage capacity fluctuate in different parts of the world.

    Yup, if far east customers (also looking for LNG) offer enough to make transit profitable, they’ll be off.
    However, any local refuelling will also be subject to price signals.

  9. поднимите перископ, товарищ

    We have effective maritime air cover again, losers. Bad timing.

  10. Alternative story.
    Every storage facility is full, the weather is mild, usage is low- hence there’s nowhere to put the stuff.
    I think Pat’s got it right.
    Floating storage offshore is great as an additional reserve, but these ships cost money.
    Which is why the price of gas went briefly negative a couple of days ago.

  11. TPTB seem keen to convince themselves this is light at the end of the tunnel, but it could be a train.

    We have not yet cracked the loss of Russian fuels to Europe. We have very, very expensively and temporarily papered over those cracks by spending a fuckton of borrowed money on LNG. The EU is also still pressing ahead with a savage rationing plan, asking member states to reduce consumption by 15%.

    This is not compatible with prosperity, we already know that we need secure access to cheap energy (ie. 2019 prices or lower) or we’ll face a very painful restructuring of the economy which will result in sharply lower standards of living in the 2020’s and 30’s, and possibly forever.

    If we’re lucky, things will calm down and the weather will be mild enough to avoid blackouts in the short term. If we have average luck, something else will happen. Something could happen to Yamal, or the bombardment of Ukrainian power and heating facilities could force another few million refugees westward, or technical issues in Norway or France could reduce the amount of energy available to purchase.

    We’re at the stage where we’re cheering on our own house fire simply because the roof hasn’t caved in yet. If I understand the Judas Sunak plan, it’s to pretend the strategic problem will go away on its own while we footer around with doing the same tried and true things that already failed under Cameron and Osborne. Now I’m the one who – like the gay matador – is caught on the horns of a dilemma. We don’t want blackouts (that’d be a disaster for our country), but we don’t want to be slow-boiled into permanent Net Zero poverty either. Some short, sharp pain this January might be better than a decade or two of slow-rolling Net Zero. T’were better if it unravels quickly, while we’re still on the good side of the poorly conceived ‘transition’.

    But at least Suella has gotten Priti’s old job back and no doubt we’ll be hearing about how much the government disapproves of wokeshit and illegal immigration.

  12. We don’t want blackouts (that’d be a disaster for our country), but we don’t want to be slow-boiled into permanent Net Zero poverty either. Some short, sharp pain this January might be better . . .

    Blackouts for standing up to the Russians bad; blackouts to frighten people about Net-Zero good.

    TPTB seem keen to convince themselves this is light at the end of the tunnel, but it could be a train.

    But it could be the light at the end of the tunnel. I’ve edited this comment due to too much conflict-worthy OT (basically, if we make it through the winter Putin is toast – and what happens then), but I see cheap energy on the horizon.

  13. PJF – Imagine thinking you’re owning Putler (:smirk:) while you’re actually just shivering in the dark like a chump.

    Blackouts would be terrible, the only possible upside would be expediting the crisis point Net Zero is going to bring us to anyway. Sometimes the frog can jump out of the saucepan if the heat rises quickly enough.

    basically, if we make it through the winter Putin is toast

    Yeah, no. If we keep taking disproportionate economic losses over Ukraine, it’s not Putin who is gonna be in trouble with his electorate/selectorate. Hence the extremely bad news on fracking yesterday.

    None of this is normal, we shouldn’t be debating how cold and dark our homes might become in the winter of early 2023. Electricity bills aren’t something normal working people should be struggling to pay. We should be in flying cars and booking holidays on the Moon by now.

    I would love to see cheap energy on the horizon. Where is it?

  14. “Could we invite the tankers to earn a few bob by ramming invaders’ boats in the Channel?”. Surely more profitable to use their kit to give the buggers a lift over. If they are really clever they could also get paid for returning them to where they came from.

  15. Blackouts would be terrible . . .

    Depends on the level. My town suffered a two-hour complete blackout just recently. Everything is still here (the worst thing was the fucking cacophony of alarms when power came back on). The lowest level proposed for the rollings is three three-hour blackouts a week. Even in grim weather that’s easily adaptable to.

    Imagine thinking you’re owning Putler (:smirk:) while you’re actually just shivering in the dark like a chump.

    You imagine, in your ignorance, the worst for us and the best for him. You really don’t seem to have a clue what a bad spot Russia is in “:smirk:”

    I would love to see cheap energy on the horizon. Where is it?

    Get your imagination to seeing Russia losing in its escapade and still needing to sell what we will then be able to buy. Ukraine can then look at developing its vast reserves (second in Europe to Norway’s).

  16. ” The lowest level proposed for the rollings is three three-hour blackouts a week. Even in grim weather that’s easily adaptable to.”

    Adaptable, yes. Acceptable…. who the hell are you kidding?

  17. Adaptable, yes. Acceptable…. who the hell are you kidding?

    Don’t remember addressing acceptability, but since you mention it, what level of acceptance are you referring to? Disgusted of Tunbridge Wells, or murderous revolutionary? As Dennis says, there is a difference and the difference is important. How acceptable was it that we were all deprived of our freedoms for two years recently? How acceptable will it be if we are again? By the same government that a few days ago we were fretting over the survival of?

    Acceptable…. who’s kidding who?

  18. Wonko – a plan so sane, it’s actually crazy.

    PJF – Depends on the level. My town suffered a two-hour complete blackout just recently. Everything is still here (the worst thing was the fucking cacophony of alarms when power came back on). The lowest level proposed for the rollings is three three-hour blackouts a week. Even in grim weather that’s easily adaptable to.

    By the Blessed Margaret Thatcher: No, no, no.

    This isn’t a small localised blackout, they’re talking about shutting down an entire, highly technological, densely populated country of over 70m people for hours a time in the dead of winter. Repeatedly.

    What will that cost us? What damage will it do? What new and exciting antisocial habits will ensue? Nobody knows, but I’m afraid to see the bill.

    However this is also a moral question.

    It should be unacceptable that the country that invented the modern world, one of the richest and most successful societies on planet Earth, a major hydrocarbons producer in its own right, a country that’s chock full of lovely coal, and fantastic riches of shale gas… is seriously even considering the possibility of losing access to electricity. We should not tolerate it. If we tolerate this, our children will be next. We should cause a fuss if this happens, perhaps even a ruckus.

    We should want, and do want, better for our children than the misery and want of Net Zero / Infinity Debt. We want them to have ease and abundance and grace. We want them to have flying cars and rocket ships to Mars, not 742 different genders and a pathetic ramshackle society where electricity is a luxury good.

    No, let’s not let the buggers get away with it. Let’s set lions on them instead. I want to live in a Britain where politicians physically shit themselves with fright at the thought of their constituents not having heat and light.

    You imagine, in your ignorance, the worst for us and the best for him. You really don’t seem to have a clue what a bad spot Russia is in “:smirk:”

    I’m trying to prognosticise where current currents are heading. We’re losing more due to sanctions than Russia is. A lot more. Russia is tripling down on troops + strikes against Ukraine (something that should be impossible if the sanctions were working – so why do we keep hitting ourselves?). The bills for the lost decade of QE plus the Covid insanity are coming due. We ran out of weapons we can easily transfer to Ukraine, now we’re looking at weakening NATO countries to sustain Ukraine’s burn rate. Russia has found a new notch on the pain dial (blackouts and refugees) – if they decide to use it in earnest, it’s hard to see Europe staying in the war.

    At the end of the day, Ukraine is a lot more important to them than it is to us.

    If things start going seriously wrong for Putin in Russia too, who knows? But so far none of those predictions have panned out, while we’ve had three prime ministers.

    – I would love to see cheap energy on the horizon. Where is it?

    Get your imagination to seeing Russia losing in its escapade and still needing to sell what we will then be able to buy. Ukraine can then look at developing its vast reserves (second in Europe to Norway’s).

    So either way, the answer is Russia?

    Fuck.

  19. “This isn’t a small localised blackout, they’re talking about shutting down an entire, highly technological, densely populated country of over 70m people for hours a time in the dead of winter. Repeatedly.”

    That can’t be true, if it was they’d need to restart the grid each time, which is a) not easy and b) a real ball-ache. It must be different areas at different times, otherwise whats the point? The idea would be to reduce demand to match the available generating capacity, which is never going to fall to zero, so you would never be shutting down the entire country at the same time.

  20. Imagine picking the children up from school in December in Stanley – just as you get a text message from Northern PowerGrid or whoever saying you’ll have no power from 4-7. Whole of Consett to Annfield Plain down.
    You can’t drive home, there WILL BE NO INTERNET.
    You could drive to Durham, the kids use the Wi-Fi at the Wetherspoons and you have a curry club meal. The kids will love you and tell Jenny’s mum who you fancy that you’re ace.
    We’ll adapt.
    And your children will tell their grandchildren.
    Bit of planning involved of course, so you’ve got to be ready.

  21. Jim is correct. No plans can be made for, say, military events (such as Ukraine has suffered) but for things like general gas shortages, plans are already in place. You can check out the default arrangements for escalating problems and see how they’ll effect you, while specific schedules will be communicated as and when.

    The default plan is essentially an enforced national rationing system for when voluntary conservation actions are insufficient. It’s designed to conserve electricity generating fuel. It doesn’t involve whole towns or areas being shut off; towns or areas are divided up into many examples of 18 “load blocks”. So during a scheduled 3 hour disconnection, all examples of one of the load blocks all across the country will be shut off at once. So multiple small sections of all towns and areas will “go dark” but everything else stays on.

    Basically, 1/18th of the country, divided up all over, gets switched off at the same time. Followed by the next 1/18th at the next scheduled shutoff. The local experience will likely be streets, sides of streets, or other groupings going off for three hours but the rest of area being normal.

    https://www.dailymail.co.uk/news/article-11329425/Government-documents-reveals-blackouts-managed-starting-three-power-cuts-week.html

    Find out which load block you are. Decide whether you’ll sit out the three hour disconnections or have some method of being powered through them (generator, battery-inverter, etc).

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