Energy Crisis in Europe - thread

[gwb-trading]

Seems to be pretty early to be taking a victory lap, but if they have the goods and it is already in storage, then go for it.

Scholz and Germany in general got off to such a clumsy start in responding to the Ukraine war and trying to figure out whether they were still Russia's buddies and would still get gas there, and then the German green party bitching about using anything other than granola for fuel, that I did not think they could get their shit together.

No victory laps for Angela Merkel though. I am pretty sure that Vlad was bonking her back in the old days when they were both commies in East Germany.

Ukraine war: How Germany ended reliance on Russian gas
"Energy security for this winter is guaranteed," the Chancellor Olaf Scholz told MPs in the German parliament on Wednesday morning.



https://www.bbc.com/news/world-europe-63709352

Germany has stockpiled enough gas away to be at more than 120% of the capacity needed to support the worse case winter scenario. This was done however at tremendous cost in the open market.

Despite Russian propaganda -- nobody is going to freeze this winter in Germany. Those Russian conscripts in Ukraine however are going to be freezing their asses off -- the only heat they will receive will be delivered by the Ukrainians in the form of artillery shelling.

The real question for Germany comes as they roll into spring next year -- will their new and expanding LNG infrastructure support Germany's ongoing industrial needs.

 

[TreeFrogTrader]

The real question for Germany comes as they roll into spring next year -- will their new and expanding LNG infrastructure support Germany's ongoing industrial needs.

The Germans have recently discovered coal and their existing nuclear plants which will free up some of the lng for industries that specifically need lng.

The wokesters are all sort of swallowing hard and accepting some of this. One of the things that just happened or is happening at these latest worldwide climate change forums, is to designate (while biting on a glove and grimacing) LNG as a green energy or climate friendlier energy. Ya know, there has always been the argument that while it is carbon emitting is cleaner than other fossil fuels so therefore should be treated as a transitional energy so that you don't all freeze to death in the dark waiting for the green energy to prevail. So there is more "permission" now to look at lng sources. Scholtz gets high fives now for hustling over to places like Senegal to broker deals with them. Two years ago he would not have been allowed back in the country if he did that. This is the same Sholtz that needed the Green Party to put a government together.

 

[Atlantic]

https://oilprice.com/Latest-Energy-News/World-News/Europe-Gas-Crisis-Subsides-Trafigura.html

Europe Gas Crisis Subsides: Trafigura

By Irina Slav - Nov 23, 2022, 7:30 AM CST

The gas supply crunch that Europe has been struggling with for months now seems to be abating, and the continent might emerge from this winter relatively unscathed—but only if the Russian gas pipeline through Ukraine remains open.

This is according to the chief executive of Trafigura, Jeremy Weir, as quoted by the Financial Times today.

Speaking at a commodities conference organized by the FT, Weir said that Europe appears to have enough gas for the winter thanks to a strong storage refill season and a mild autumn.

Weir also sounded a rare optimistic note for next winter, saying that according to Trafigura predictions, Europe will emerge from winter with 30 billion cubic meters still in storage, which will make the subsequent refill for winter 2023/24 an easier task than previously expected.

“Should that be the case, we may not have so much of a problem the following winter, which was actually the real concern,” Trafigura’s chief executive said.

Yesterday, however, Russia threatened it might reduce gas volumes shipped via Ukraine after it noticed that some of the gas destined for Moldova was not actually reaching that country.

On Monday, state gas major Gazprom said that it had noticed some of the gas intended for Moldova under a contract with the local gas firm was being diverted by Ukraine. If the imbalance in gas transit continues, Gazprom will start reducing gas flows via Ukraine on the morning of November 28, the Russian gas giant said.

Also on Monday, the European Commission published its decision on the gas price cap demanded by more than half of EU members. The cap was set at 275 euros per one megawatt-hour, to be triggered only if two conditions are met at the same time and to be deactivated if it puts energy markets in jeopardy.

By Irina Slav for Oilprice.com

 

[TreeFrogTrader]

Okay, I will concede that I have more or less tuned out this screwy oil-price cap plan that the Europeans have in progress- mostly because not even the Europeans could explain how it will be enforced or the what the next steps are if Russia decides to put the wood to the Europeans rather than sell at the cap price.

Okay, fine, whatever. The point is that they seem to be committed to going ahead with it so we shall see what kind of a clown show they are buying into. If it works, that is a feather in their cap. But - less us just say that- so far they do not have a good track record in energy planning and foreseeing what Putin may or may not do in regard to his ambitions.

I see Mnuchin dissing it bigtime. The lefties are all set because Mnuchin is/was a Trump guy so he could not possibly be pointing out anything that requires careful consideration. Easy peasy for them.

We shall see. Ya never know with the Europeans. They could be riding high on some green plan one day, and sitting in the dark and cold getting ready to go out with their begging bowls the next. We have such types here in the U.S. as well- well represented on the Forum too.

And then there is the theory/belief by some that if the Ruskies cut off supply the Saudis and company will boost production.....wa...wa....wa. wut? I don't drink but find out what they are drinking and order me a gallon.

====================================================
Critics of the price cap measure, including former Treasury Secretary Steve Mnuchin, have called the plan “ridiculous.”

Mnuchin told CNBC during a panel in November at the Milken Institute’s Middle East and Africa Summit that the price cap was “not only not feasible, I think it’s the most ridiculous idea I’ve ever heard.”

Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, said that while a worst-case scenario envisions Russia cutting off the global supply of its oil, “the Saudis and Emiratis would boost production."

“Russia has made is clear the countries that abide by the cap won't receive their oil and that could result in cuts to natural gas exports as well," she said. “This will be an interesting few weeks and few months.”


https://www.marketbeat.com/articles...-per-barrel-russian-oil-price-cap-2022-12-01/

 

[gwb-trading]

Okay, I will concede that I have more or less tuned out this screwy oil-price cap plan that the Europeans have in progress- mostly because not even the Europeans could explain how it will be enforced or the what the next steps are if Russia decides to put the wood to the Europeans rather than sell at the cap price.

Okay, fine, whatever. The point is that they seem to be committed to going ahead with it so we shall see what kind of a clown show they are buying into. If it works, that is a feather in their cap. But - less us just say that- so far they do not have a good track record in energy planning and foreseeing what Putin may or may not do in regard to his ambitions.

I see Mnuchin dissing it bigtime. The lefties are all set because Mnuchin is/was a Trump guy so he could not possibly be pointing out anything that requires careful consideration. Easy peasy for them.

We shall see. Ya never know with the Europeans. They could be riding high on some green plan one day, and sitting in the dark and cold getting ready to go out with their begging bowls the next. We have such types here in the U.S. as well- well represented on the Forum too.

And then there is the theory/belief by some that if the Ruskies cut off supply the Saudis and company will boost production.....wa...wa....wa. wut? I don't drink but find out what they are drinking and order me a gallon.

====================================================
Critics of the price cap measure, including former Treasury Secretary Steve Mnuchin, have called the plan “ridiculous.”

Mnuchin told CNBC during a panel in November at the Milken Institute’s Middle East and Africa Summit that the price cap was “not only not feasible, I think it’s the most ridiculous idea I’ve ever heard.”

Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security, said that while a worst-case scenario envisions Russia cutting off the global supply of its oil, “the Saudis and Emiratis would boost production."

“Russia has made is clear the countries that abide by the cap won't receive their oil and that could result in cuts to natural gas exports as well," she said. “This will be an interesting few weeks and few months.”


https://www.marketbeat.com/articles...-per-barrel-russian-oil-price-cap-2022-12-01/

The E.U. agreed on a price cap of $60 per barrel for Russian oil, senior diplomats said, though the plan calls for soft-touch enforcement.
The policy aims to limit Russia’s revenue while averting a global oil shock.
Friday, December 2, 2022 11:50 AM ET
https://www.nytimes.com/live/2022/12/02/world/russia-ukraine-war-news

 

[TreeFrogTrader]

The E.U. agreed on a price cap of $60 per barrel for Russian oil, senior diplomats said, though the plan calls for soft-touch enforcement.
The policy aims to limit Russia’s revenue while averting a global oil shock.
Friday, December 2, 2022 11:50 AM ET
https://www.nytimes.com/live/2022/12/02/world/russia-ukraine-war-news

Yup, that was in the works. Poland and couple others wanted lower.

The big issue is what the Russians will engage with. Vlad says no to it but he has needs and it is hard to tell right now whether his need for revenue at that flimsy price is greater than his need to see the Europeans struggle with a shut off of any supply from them. Don't know, but we will know soon.

Also, as I said above, those who are saying that the Saudi's will supply if Vlad shuts off, well, I just don't know WTF they are smoking.

Just to put a finer point on that, the Saudi's may ship more to Europe if Vlad shuts off Europe because Russian oil to Asia will increase and cut into the Saudi's market there. So there is that. But some pundits are saying they will pump more if Europe needs it. Very iffy as Biden found out.

 

[gwb-trading]

Yup, that was in the works. Poland and couple others wanted lower.

The big issue is what the Russians will engage with. Vlad says no to it but he has needs and it is hard to tell right now whether his need for revenue at that flimsy price is greater than his need to see the Europeans struggle with a shut off of any supply from them. Don't know, but we will know soon.

Also, as I said above, those who are saying that the Saudi's will supply if Vlad shuts off, well, I just don't know WTF they are smoking.

Just to put a finer point on that, the Saudi's may ship more to Europe if Vlad shuts off Europe because Russian oil to Asia will increase and cut into the Saudi's market there. So there is that. But some pundits are saying they will pump more if Europe needs it. Very iffy as Biden found out.

Ukraine war: Russia says it will not accept oil price cap
https://www.bbc.com/news/world-europe-63848257

Russia says it will not accept a cap on prices for its oil exports approved by Western allies.

The cap, approved on Friday, is aimed at stopping countries paying more than $60 (£48) for a barrel of seaborne Russian crude oil.

The measure - due to come into force on Monday - intensifies Western pressure on Russia over the invasion.

But Kremlin spokesman Dmitry Peskov said that Moscow had prepared for the move and was assessing its options.

"We will not accept this ceiling," he said.

The price cap was put forward in September by the G7 group of industrialised nations (the US, Canada, the UK, France, Germany, Italy, Japan and the EU) in a bid to hit Moscow's ability to finance the war in Ukraine.

In a joint statement, the G7, the European Union and Australia said the decision was taken to "prevent Russia from profiting from its war of aggression against Ukraine".

The White House described the deal as "welcome news", saying a price cap will help limit Putin's ability to fund the Kremlin's "war machine".

UK Chancellor Jeremy Hunt said the UK would not waver in its support for Ukraine and would continue to look for new ways to "clamp down on Putin's funding streams".

Though the measures will most certainly be felt by Russia, the blow will be partially softened by its move to sell its oil to other markets such as India and China - which are currently the largest single buyers of Russian crude oil.

Ukraine says the Western-proposed cap should be halved.

"Russia's economy will be destroyed, and it will pay and be responsible for all its crimes," Ukraine's presidential chief of staff Andriy Yermak said on Saturday on Telegram.

But a cap of "$30 would have destroyed it more quickly", he added.

The agreement of a price cap comes just days before an EU-wide ban on Russian crude oil imported by sea comes into force, also on 5 December.

The price cap - which is meant to affect oil exports worldwide - is meant to complement that.

Countries which sign up to the G7-led policy will only be permitted to purchase oil and petroleum products transported via sea that are sold at or below the price cap.

Ukraine's Western allies also plan to deny insurance to tankers delivering Russian oil to countries that do not stick to the price cap. This will make it hard for Russia to sell oil above that price.

Before the war, in 2021, more than half of Russia's oil exports went to Europe, according to the International Energy Association. Germany was the largest importer, followed by the Netherlands and Poland.

But since the war, EU countries have been desperately trying to decrease their dependency. The US has already banned Russian crude oil, while the UK plans to phase it out by the end of the year.

 

[TreeFrogTrader]

Ukraine war: Russia says it will not accept oil price cap
https://www.bbc.com/news/world-europe-63848257

Russia says it will not accept a cap on prices for its oil exports approved by Western allies.

The cap, approved on Friday, is aimed at stopping countries paying more than $60 (£48) for a barrel of seaborne Russian crude oil.

The measure - due to come into force on Monday - intensifies Western pressure on Russia over the invasion.

But Kremlin spokesman Dmitry Peskov said that Moscow had prepared for the move and was assessing its options.

"We will not accept this ceiling," he said.

The price cap was put forward in September by the G7 group of industrialised nations (the US, Canada, the UK, France, Germany, Italy, Japan and the EU) in a bid to hit Moscow's ability to finance the war in Ukraine.

In a joint statement, the G7, the European Union and Australia said the decision was taken to "prevent Russia from profiting from its war of aggression against Ukraine".

The White House described the deal as "welcome news", saying a price cap will help limit Putin's ability to fund the Kremlin's "war machine".

UK Chancellor Jeremy Hunt said the UK would not waver in its support for Ukraine and would continue to look for new ways to "clamp down on Putin's funding streams".

Though the measures will most certainly be felt by Russia, the blow will be partially softened by its move to sell its oil to other markets such as India and China - which are currently the largest single buyers of Russian crude oil.

Ukraine says the Western-proposed cap should be halved.

"Russia's economy will be destroyed, and it will pay and be responsible for all its crimes," Ukraine's presidential chief of staff Andriy Yermak said on Saturday on Telegram.

But a cap of "$30 would have destroyed it more quickly", he added.

The agreement of a price cap comes just days before an EU-wide ban on Russian crude oil imported by sea comes into force, also on 5 December.

The price cap - which is meant to affect oil exports worldwide - is meant to complement that.

Countries which sign up to the G7-led policy will only be permitted to purchase oil and petroleum products transported via sea that are sold at or below the price cap.

Ukraine's Western allies also plan to deny insurance to tankers delivering Russian oil to countries that do not stick to the price cap. This will make it hard for Russia to sell oil above that price.

Before the war, in 2021, more than half of Russia's oil exports went to Europe, according to the International Energy Association. Germany was the largest importer, followed by the Netherlands and Poland.

But since the war, EU countries have been desperately trying to decrease their dependency. The US has already banned Russian crude oil, while the UK plans to phase it out by the end of the year.

Vlad's plan is to ship more Russia oil to other places, asia, and some Eurasian buddies.

The European plan to block him on this is to not allow insurance on vessels carrying Russian oil, and most of the shipping companies are insured with European companies.

Meanwhile, Vlad has/is developing a so-called "shadow fleet" of alternative vessels, that are insured by the Russian government or some crock-companies that are acceptable to the carriers.

And also, meanwhile, the Europeans and Americans have plans to sanction any country that participates in workaround schemes.

And so it goes.

Bottom line, it all kicks in Monday, as in the day after tomorrow.

Let the games begin.

Probably one of the biggest factors is China's frigging covid policy. If they stay in lockdown that leaves a lot more oil on the immediate term market. On the other hand, the Saudis say they will cut production before letting the price go down.

A lot of moving parts. It's a game where all the snakes in the world are involved. In the old days the CIA would have solved some of this with a couple ounces of lead. Ahh, yes. The good old days.

 

[gwb-trading]

Germany 'ignored warning signs' on Russia: ambassador
Germany “ignored warning signs” and “failed to take criticism from our allies” regarding the Nord Stream 2 gas pipeline, the German ambassador to the United States, Emily Haber, has said.
https://www.polskieradio.pl/395/778...ny-ignored-warning-signs-on-russia-ambassador

 

[TreeFrogTrader]

Reality is upon the Europeans now.

Of course, they have to manage their limited supplies well. Just because it gets cold and they are still doing okay does not necessarily mean all is well if their "burn rate" is above what they can sustain for the winter.

They say they are okay, and I have no reason to argue against it. Except they have done such a sh#tty job of energy planning in general you have to see the proof over time.

Europe Faces Stress Test As Arctic Blast Drives Surge In Power Demand

• The Nordic countries, the UK, and Germany will all see below-average temperatures for this time of the year over the next two weeks.
• After a warm autumn with high temperatures, the cold snap over the next two weeks will put European energy systems to the test.
• Low wind speeds led to soaring power prices in the EU last week.

https://oilprice.com/Energy/Energy-...rctic-Blast-Drives-Surge-In-Power-Demand.html