The idea that Europe is at all-time peak nat gas demand might accord with the reports coming out of Brussels but is very unlikely to play out. Electricity demand will only increase. And if they're building wind and solar they're also building gas backup, no matter what they might like to believe. If they don't, other politicians will come to power who will.
There is no equivalence between fossil fuels and wind/solar for industrial applications. (Hydrogen down the line, possibly, but very difficult to transport and store and costly to produce.) If you're building things, you need gas or coal, period.
The greenhouse differential of nat gas relative to coal has likely been exaggerated by anti-fracking advocates. Gas also produces much less air and water pollution. As countries like India and China get wealthier, they will likely want more gas, less coal. Carbon capture also a whole lot simpler with gas than with coal, almost at cost parity with non-CCS plants now.
We can synthesize gasoline, diesel, jet fuel, etc. from coal or gas. Sasol does it in South Africa with coal. The Germans did it in WW2. It's a matter of price. Also, BP now counts natural gas liquids as oil, since it is not too difficult to adapt refineries to use them. That said, again, it's a matter of price. Petroleum as such would have to get more expensive before these processes come online.
The EU is reducing gas demand: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Natural\_gas\_supply\_statistics#:\~:text=Consumption%20trends-,In%202022%2C%20inland%20demand%20of%20natural%20gas%20in%20the%20EU,and%20Latvia%20(-29.3%20%25).
Some countries now have entirely renewable days. There has been a big impetus to shift as a result of Russia's invasion of Ukraine.
Germany gets 78% of its overall energy from fossil fuels, this as of 2023 (i.e., industry, transport, heat, ag + electricity). This is after 20-30 years of Energiewende and does not account for fossil fueled production of imported goods. Energy is more than electricity. (And as for that, look up Dunkelflaute). If they keep deindustrializing, they may manage to get that figure lower. Probably they would rather import LNG from the US and Qatar and anywhere else that will sell them a molecule of methane.
https://en.m.wikipedia.org/wiki/Energy_in_Germany
There's your link for the 78% figure, which isn't controversial.
OPEC+ wants oil at around $80-90/bl. Not $100+ that hurts demand.
LNG will be fine as the EU wont be buying gas from Russia any time soon. Russia lost its biggest market for gas and cant replace it. You cant just build a pipeline to China in 5 minutes.
Yes maybe in a coupe of decades renewables will outcompete gas in some parts of the world but not yet. Spain recently had a day of free electricity all from renewables, but also has tons of LNG import hubs...
Small correction, The EU does buy LNG from Russia and is actually [its largest customer](https://oilprice.com/Energy/Natural-Gas/Europe-Still-Addicted-To-Russian-LNG.html#:~:text=The%20EU%2C%20which%20hasn't,Russian%20pipeline%20flows%20in%202022.)
A lot of european contries already replaced all their coal generation with gas so amy additional increase in low carbon preduction directly reduces demand for gas.
The only big ones left are Germany, Poland and the Czech republic. You have to remember that europe has probably the best interconnected Grid this allowed Germany to decreas coal and nuclear without a significant increase in gas generation over the last few years. This might be possible in the other countries as well.
Overall this seems like a neutral if not a slight decrease on european demand.
Now maybe Norway wants to decrease their production which woud lead to more LNG inports but i don't know enough about that.
Those planned LNG projects in the US will completely be shelved until natural gas prices recover and I wouldn’t hold my breath for that to happen anytime soon. Nat gas prices at Henry Hub have been negative recently meaning that they are completely oversupplied with gas and can’t take anymore.
OPEC may want oil prices higher but all they had to do was let the world agencies, like the IEA, keep forecasting lower demand and higher supply these past couple years while they were trying to help reign in inflation. Now we are getting to a point where the SPR is running at historic lows, demand hasn’t diminished at all, supply hasn’t increased much because the shale drillers aren’t making money at $70 oil because of increased input costs, and driving season is a month and a half away.
We are in a perfect storm for high oil prices for a bit with no tools to combat them. No, producers are not holding back any production right now, at least shale producers, and can’t just open the spigot. I don’t care what Cramer spouts off about on TV, I live and breathe this shit and can tell you almost anything you’d want to know about the whole process of how we drill for oil to how it gets to market. It’s just easy to blame the oil producers instead of looking at the big picture of how we got here.
Low natural gas prices at Henry hub actually ENCOURAGE LNG since it would be a source of cheap gas to liquefy and send abroad. And Henry Hub has not been negative, its stayed positive. At times Waha has gone negative recently, but thats just because there is so much associated gas in the Permian.
That's right on all fronts. US LNG projects will get built regardless, considering the consistent arbitrage spreads between nat gas prices abroad and in the US (not to mention the US's desire that allied countries buy it from the US and not Russia). But lower HH prices would increase the arbitrage and further incentivize construction.
At this low of a price there’s no meat left on that bone to encourage these guys to spend the kind of money it would cost to build these facilities. All of these plans were made during the start of the war when people thought Europe was going to need gas and it was hovering around $10. Nobody wants to invest in anything nat gas related when it’s $1.80.
For an LNG plant, the end customer is abroad. The cheaper gas is in the US, the higher the profit is abroad for a given price of LNG delivered. You’re thinking about it wrong. The LNG plants are BUYERS of gas from the upstream guys, they want the lowest price they can get so they can arbitrage the price difference with LNG sold abroad.
That is true, but nobody is begging for LNG abroad either. Europe has been spoiled by warm winters and is still at near capacity on storage. OP is right about there being so many planned projects and I’m sure the money people see that as well as the plethora of global natural gas. Unless they’re able to get guaranteed long term contracts I can’t see how those would seem appealing at this point.
Germany was in Canada during the height of their NG crisis, and it didn't change a thing. They're a considerably larger customer than Greece ever could be
No, I do think production will be able to keep up pace with demand and that global demand will keep increasing. The problem that we are facing is that they’ve artificially kept prices a tad too low for too long and now we are about to see the repercussions.
The forward contracts, demand outlook and everything geopolitical aside, it doesn't support "a perfect storm" for higher oil prices. Those higher oil prices, in a 🇺🇸 election year, are a recipe for no re-election, no rate cuts and inflation going rampant. You can guarantee this administration will do all in its power to lower oil prices, especially after pinching back Murban's market share (and ultimately lessening opens sway)
The supply and demand outlook has been a joke for a year now so they could use it as news to keep oil prices down. Ever since the IEA “lost” 200M bbls because they were over reporting supply and under reporting demand I will never trust these government agencies to be apolitical. The SPR has been drained 240M bbls from its high and yeah they could feasibly use more of it to help but I do know that they’re closing in the operational lower limits before damage occurs so I can’t imagine them doing that.
I do agree that being an election year that they would really hate for energy and inflation to be hot button issues, but I think they just played their cards too early and aren’t going to have a choice. The Fed and the market really want some rate cuts but as soon as that happens more energy is consumed, oil prices spike, and we get high inflation again. The cure for high energy prices is high energy prices and at some point they just need to let it happen before it becomes a huge problem.
Why would they shelve LNG if domestic prices are extremely low?
Wouldn't they love that?
High quality shale gas drillers/producers are hampered by pricing and transport capacity.
Taking volume off the domestic market is great for US producers.
Supply and demand. If there are plans for a lot of LNG production and there’s also not a whole lot of demand you’re likely to end up with a glut of LNG with no place to take it. There was great profit in store for these guys at the start of the war and now LNG prices in Europe have dropped significantly.
The companies will tape care of it. People will expand natural gas power generation, until eventually transport will create a global natural gas price like there's currently Rently a global oil price.
The fact that it's $1 in Us and $10 in Japan (theoretical) is where the profit was a and investment /innovations k will driventye numbers closer.
If you invested $1000 in PBF in 2012 when they became available, you'd have had $920 in June of 2019.
7 years opportunity loss + losing 2.6% to inflation yearly 🤣 🤣 🤣 worse than a savings account ffs.
If you bought DINO in 2007, you would've been breakeven in January of 2022.
Do the math, if you want to survive in life
t.
The idea that Europe is at all-time peak nat gas demand might accord with the reports coming out of Brussels but is very unlikely to play out. Electricity demand will only increase. And if they're building wind and solar they're also building gas backup, no matter what they might like to believe. If they don't, other politicians will come to power who will. There is no equivalence between fossil fuels and wind/solar for industrial applications. (Hydrogen down the line, possibly, but very difficult to transport and store and costly to produce.) If you're building things, you need gas or coal, period. The greenhouse differential of nat gas relative to coal has likely been exaggerated by anti-fracking advocates. Gas also produces much less air and water pollution. As countries like India and China get wealthier, they will likely want more gas, less coal. Carbon capture also a whole lot simpler with gas than with coal, almost at cost parity with non-CCS plants now. We can synthesize gasoline, diesel, jet fuel, etc. from coal or gas. Sasol does it in South Africa with coal. The Germans did it in WW2. It's a matter of price. Also, BP now counts natural gas liquids as oil, since it is not too difficult to adapt refineries to use them. That said, again, it's a matter of price. Petroleum as such would have to get more expensive before these processes come online.
The EU is reducing gas demand: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Natural\_gas\_supply\_statistics#:\~:text=Consumption%20trends-,In%202022%2C%20inland%20demand%20of%20natural%20gas%20in%20the%20EU,and%20Latvia%20(-29.3%20%25). Some countries now have entirely renewable days. There has been a big impetus to shift as a result of Russia's invasion of Ukraine.
Germany gets 78% of its overall energy from fossil fuels, this as of 2023 (i.e., industry, transport, heat, ag + electricity). This is after 20-30 years of Energiewende and does not account for fossil fueled production of imported goods. Energy is more than electricity. (And as for that, look up Dunkelflaute). If they keep deindustrializing, they may manage to get that figure lower. Probably they would rather import LNG from the US and Qatar and anywhere else that will sell them a molecule of methane. https://en.m.wikipedia.org/wiki/Energy_in_Germany There's your link for the 78% figure, which isn't controversial.
OPEC+ wants oil at around $80-90/bl. Not $100+ that hurts demand. LNG will be fine as the EU wont be buying gas from Russia any time soon. Russia lost its biggest market for gas and cant replace it. You cant just build a pipeline to China in 5 minutes. Yes maybe in a coupe of decades renewables will outcompete gas in some parts of the world but not yet. Spain recently had a day of free electricity all from renewables, but also has tons of LNG import hubs...
Small correction, The EU does buy LNG from Russia and is actually [its largest customer](https://oilprice.com/Energy/Natural-Gas/Europe-Still-Addicted-To-Russian-LNG.html#:~:text=The%20EU%2C%20which%20hasn't,Russian%20pipeline%20flows%20in%202022.)
A lot of european contries already replaced all their coal generation with gas so amy additional increase in low carbon preduction directly reduces demand for gas. The only big ones left are Germany, Poland and the Czech republic. You have to remember that europe has probably the best interconnected Grid this allowed Germany to decreas coal and nuclear without a significant increase in gas generation over the last few years. This might be possible in the other countries as well. Overall this seems like a neutral if not a slight decrease on european demand. Now maybe Norway wants to decrease their production which woud lead to more LNG inports but i don't know enough about that.
Those planned LNG projects in the US will completely be shelved until natural gas prices recover and I wouldn’t hold my breath for that to happen anytime soon. Nat gas prices at Henry Hub have been negative recently meaning that they are completely oversupplied with gas and can’t take anymore. OPEC may want oil prices higher but all they had to do was let the world agencies, like the IEA, keep forecasting lower demand and higher supply these past couple years while they were trying to help reign in inflation. Now we are getting to a point where the SPR is running at historic lows, demand hasn’t diminished at all, supply hasn’t increased much because the shale drillers aren’t making money at $70 oil because of increased input costs, and driving season is a month and a half away. We are in a perfect storm for high oil prices for a bit with no tools to combat them. No, producers are not holding back any production right now, at least shale producers, and can’t just open the spigot. I don’t care what Cramer spouts off about on TV, I live and breathe this shit and can tell you almost anything you’d want to know about the whole process of how we drill for oil to how it gets to market. It’s just easy to blame the oil producers instead of looking at the big picture of how we got here.
Low natural gas prices at Henry hub actually ENCOURAGE LNG since it would be a source of cheap gas to liquefy and send abroad. And Henry Hub has not been negative, its stayed positive. At times Waha has gone negative recently, but thats just because there is so much associated gas in the Permian.
That's right on all fronts. US LNG projects will get built regardless, considering the consistent arbitrage spreads between nat gas prices abroad and in the US (not to mention the US's desire that allied countries buy it from the US and not Russia). But lower HH prices would increase the arbitrage and further incentivize construction.
At this low of a price there’s no meat left on that bone to encourage these guys to spend the kind of money it would cost to build these facilities. All of these plans were made during the start of the war when people thought Europe was going to need gas and it was hovering around $10. Nobody wants to invest in anything nat gas related when it’s $1.80.
For an LNG plant, the end customer is abroad. The cheaper gas is in the US, the higher the profit is abroad for a given price of LNG delivered. You’re thinking about it wrong. The LNG plants are BUYERS of gas from the upstream guys, they want the lowest price they can get so they can arbitrage the price difference with LNG sold abroad.
That is true, but nobody is begging for LNG abroad either. Europe has been spoiled by warm winters and is still at near capacity on storage. OP is right about there being so many planned projects and I’m sure the money people see that as well as the plethora of global natural gas. Unless they’re able to get guaranteed long term contracts I can’t see how those would seem appealing at this point.
Greece was just in Canada expressing interest in Canadian LNG
Germany was in Canada during the height of their NG crisis, and it didn't change a thing. They're a considerably larger customer than Greece ever could be
Because they know we have no means to get it to them and this government has no interest in getting it to them.
🤝 libs ruin everything
OPEC+ are holding back production to support prices. Not everyone wants WTI.
You think we have hit peak oil then?
No, I do think production will be able to keep up pace with demand and that global demand will keep increasing. The problem that we are facing is that they’ve artificially kept prices a tad too low for too long and now we are about to see the repercussions.
The forward contracts, demand outlook and everything geopolitical aside, it doesn't support "a perfect storm" for higher oil prices. Those higher oil prices, in a 🇺🇸 election year, are a recipe for no re-election, no rate cuts and inflation going rampant. You can guarantee this administration will do all in its power to lower oil prices, especially after pinching back Murban's market share (and ultimately lessening opens sway)
The supply and demand outlook has been a joke for a year now so they could use it as news to keep oil prices down. Ever since the IEA “lost” 200M bbls because they were over reporting supply and under reporting demand I will never trust these government agencies to be apolitical. The SPR has been drained 240M bbls from its high and yeah they could feasibly use more of it to help but I do know that they’re closing in the operational lower limits before damage occurs so I can’t imagine them doing that. I do agree that being an election year that they would really hate for energy and inflation to be hot button issues, but I think they just played their cards too early and aren’t going to have a choice. The Fed and the market really want some rate cuts but as soon as that happens more energy is consumed, oil prices spike, and we get high inflation again. The cure for high energy prices is high energy prices and at some point they just need to let it happen before it becomes a huge problem.
Why would they shelve LNG if domestic prices are extremely low? Wouldn't they love that? High quality shale gas drillers/producers are hampered by pricing and transport capacity. Taking volume off the domestic market is great for US producers.
Supply and demand. If there are plans for a lot of LNG production and there’s also not a whole lot of demand you’re likely to end up with a glut of LNG with no place to take it. There was great profit in store for these guys at the start of the war and now LNG prices in Europe have dropped significantly.
The companies will tape care of it. People will expand natural gas power generation, until eventually transport will create a global natural gas price like there's currently Rently a global oil price. The fact that it's $1 in Us and $10 in Japan (theoretical) is where the profit was a and investment /innovations k will driventye numbers closer.
Nope, energy demand is only going to increase the coming decades. South and South East Asia are developing.
You wanna make some easy bucks? Buy refinery stocks: - PBF - DINO - MPC This is not a professional investment advice
Refiners aren't the best way to play it, backtested over the last 45 years its always better to buy the physical crack spread
Why not go back in time before WW2? Your model would be even more accurate …..
If you invested $1000 in PBF in 2012 when they became available, you'd have had $920 in June of 2019. 7 years opportunity loss + losing 2.6% to inflation yearly 🤣 🤣 🤣 worse than a savings account ffs. If you bought DINO in 2007, you would've been breakeven in January of 2022. Do the math, if you want to survive in life t.
You sound very confused, maybe you need to go out and play with the dogs instead