Dangerous parade in natural gas prices | OilPrice.com

Introduction There is a scream in the gas market, his likes have not been seen for many years. Instead of waiting for more cheap supplies in a year, we moved on to the fear of a shortage of winter. A number of key factors, including the lack of excavations, investment in new supply sources, limiting capital through manufacturers, and the transition to renewable energy capital allocation, were considered. Year now.

I have already discussed some of these reasons Oil price article He predicts a rise in oil and gas prices by June. Prices for both are now high, but as we have seen, oil has continued to grow at three times the price of more than a year.

Recently, some additional factors have been incorporated into the formula or highlighted and contributed to the new lack of The attitude I mentioned above. In this article, we will review how these new factors have worsened the overall market, what we will do in the near future, and how the gas will affect the final trend in the next nine months to a year.

Europe and the United Kingdom pay the price for energy

One reason is that energy supply is “green” all over the world, especially in Europe. Over the past decade, European countries have shifted to wind and solar power, as much of the current global environmental stimulus to Co2-mindedness is concentrated on the continent and flowed easily into the UK through the channel. Chasing Paris Goals And NetZero Carbon in 2050. You have paid the price for this green donkey that you can see in the table below. In contrast, in most U.S. consumption rates are around $ 0.13 per KWH.

Reminder

As recently as Wall Street Journal-WSJ article This strategy seems to be a little worrying, as the wind has stopped blowing in the summer, creating more demand for gas supplies.

“The show highlights the region’s energy markets leading to a long European winter. The rise in electricity prices in the UK, which is based on wind farms, was urgent Eliminate net carbon emissions By 2050. The prices of carbon credits needed to burn fossil fuels by electric producers are also on record.

Related – Chinese oil consumption has reached its highest level in 5 years In addition, the Europeans did not divide gas production through the entrance Carbon taxes For years. There is an old saying that if you want something small in economics, you have to pay taxes. So far, the accuracy of that old conclusion has been verified by the supply.

Storage

Source:

As usual, some injuries are self-inflicted. The initial closure of the Dutch gas giant Groningen in Europe has helped bring the EU’s current level of natural gas supply to a minimum. When supplies from Groningen begin to be restricted, and will be reduced in 2019, you will be able to boost imports from all sources from 2014 onwards.

Product

Source:

Restad’s article shows the following forecast for the European forecast market in relation to Groningen sanctions.

The failure of Groningen reaffirms Europe’s power profile. At the beginning of this century, the field returned to production reached 57 billion square meters3 A.D. In 2013, it was the central cog for decades in the northwestern European gas system.

“The rise of this huge field will force Europe to expand its gas supply more rapidly. According to Carlos Torres-Diaz, head of gas market research at Restad Energy, this is in the process of transitioning from a net exporter to a net importer in the Netherlands.

Source:

If the events in Holland do not continue, decades of severe evacuation from Groningen will result in living conditions in the area (always a concern for the Dutch), and some severe earthquakes. In addition, according to the Netherlands, windmills are only part of life.

As a result, you will get to where Europe is now as you combine pesticides to dig up new supplies by manufacturers’ capital allocations. He has to pay for his nose to keep the lights on and the heat off.

And, to whom do you pay? It is prominent in the United States. From the US coast to Europe, LNG Ships have been operating at a high rate lately, and so on JPT notes, we are still their largest supplier, But the tide has turned. From 2020, Asia began blocking European buyers from supplying LNG supplies to the United States.

The Russians are coming to the rescue. At least now. Of The EU is based on Russian gas According to the Bloomberg article, to keep their lights in a more comfortable position. Recent Fortune article He cited the East Asian drag for gas supplies:

To make matters worse, Asia still has LNG. Worldwide Before Winter ”

Lucky

So what do the UK and the EU do when some of Russia’s political inventions are so low that some have made a statement to Germany about Nord Stream 2 and dragged US supplies to Asia?

Probably a recent fertilizer plant in the United Kingdom.

Fertilizer is a lost cause in climate change. Gas is used to produce ammonia, which in turn produces nitrate fertilizers. You need fertilizer if you want to grow a high-yield crop or if you want to grow it completely. And, no, there is no work in this century-old process known as Haber-Bosch Process, which removes hydrogen from methane – a major component of natural gas. You can’t plant a wind farm in a corn field and grow corn. You must apply fertilizer. And, to get that … you need gas.

Last week, two fertilizer factories in England closed due to high gas prices. When you start again, it is nobody’s guess. Impact on fertilizer prices. It could be that food prices are rising for a variety of reasons.

When we combine all these factors into one final variable – the Cold forecast In Europe for the winter, for the next six to nine months we have a stressful situation in the European Union and in the UK.

Is the situation better in the US?

Not surprisingly, the challenges we face in the United States are related or similar to the problems across the pond. The EIA’s weekly gas storage report shows some improvement – up to 83 BCF, since last week, but as we enter the winter break we are still about 8% below the 5-year average.

At the same time, our supplies have been shut down due to shale drilling or weather events, such as the February snowstorm or the Goem wells in August. During this time we have lost 2-BCF / D from Gomez, and some have not yet returned Second week In September. Related – The European energy crisis is driving natural gas prices around the world

Exports are using LNG more and more gas pipelines than ever before in Mexico. As mentioned above, the European Union is increasing its supply from the United States and Russia. In the United States, these supplies are easily shipped and come in the form of LNG.

LNG

EAA

Mexico has made a strategic decision to expand its pipeline infrastructure to use more gas from its northern neighbor. Direct contact with WAHA and Agua Doles Centers has resulted in billions of cubic feet of flow every day in the South. The linked Energy Information Agency article shows this shale gas flow to Mexico.

“US natural gas exports to Mexico will be 6.8 BCF / D in June 2021, up 25% from June 2020 and 44% monthly average over the past five years (2016–2020). We expect these record-high flows to continue in the summer due to increased energy, higher temperatures and more industrial demand in June.

Mexico

EAA

All of this gas was seized by long-term contracts that were signed a year ago when gas supplies were high.

Nat gas

EAA

Takes you

Shortages or tight gas supplies could continue until next year. The problems in Europe are structural. They are forced to import gas from both the United States and Russia. Or both. From these sources, Asia has established itself on a gas course.

I think the same thing could happen to the United States. We have some similar contaminants for new supplies, both state and federal, as well as government funding. Many financial problems have been solved by directors’ money flow, but as we have seen, they have little interest in increasing supply. This trend in shale drags is described in detail Oil price article This month.

Cost concerns can make this situation worse. We face a very opposition government that seeks to exploit renewables by punishing oil and gas. An attribute is “in”Methane reduction lawIt pays a $ 1,800 carbon tax on tons of natural gas. Unsatisfied, the activists are trying to hinder the use of natural gas as a bridge fuel.Clean electricity program.This makes natural gas even more punishable when paying for “clean sources.” None of these policies will be legislated, as economically disadvantaged states are at war. But they are having an in-depth discussion.

What is shaking in evolution is the WPT for oil and gas producers. This will be A The resurgence of Carter-era tax policy Intended to redistribute wealth through excise tax on “non-profit profits”. Assign the current situation when the supply of products for strong demand increases. WPT was a horrible policy that failed to achieve its goals and created all sorts of negative knocking effects. used to A.D. Revoked in 1988 Great relief for everyone at the time. Wait for it to come again, the memories are gone long enough. That said, I don’t think this idea will grow and spread, there are enough reasonable members of Congress who remember the past and hurt their constituencies.

To sum up, the picture of energy around gas has changed over the past year. Supplies are tight, and manufacturers are unwilling to dig into new capital. The result will be higher prices for the future in the United States and Europe. The real challenge is to satisfy the need, no matter what the cost.

By David Messler to Oilprice.com

More Top Readings from Oilprice.com

.

Leave a Comment