We continue the oil and gas countdown
Growth Factors
Despite the development of alternative energy and the expected, and most likely, almost inevitable renaissance of nuclear energy, the world will not be able to do without oil and gas for a long time to come. But the current price crisis, which has not yet grown into a global energy crisis, is largely man-made.
There is no doubt about this, although it is caused by several factors at once. But too suspiciously synchronized, they converged in the fall of 2021. This time was designated by many as the final of a large-scale coronabesy, but someone, apparently, believes that it is too early to end with Covid-19.
In such a case, there is nothing to suffer about the problems in the energy field. Economic growth, in spite of all the pandemic difficulties imposed on the world, is so reluctant to take for granted, especially since the leaders are not at all those on whom the stakes were once made.
India and China are the first and most important factors that influenced the situation with prices, both for oil and gas. In our opinion, the growth of both oil and gas prices is most strongly influenced by the demand on their part, deliberately cut off from various sanctions and OPEC agreements.
The second factor, we believe, is the gap, which seems to be the final one, between gas prices and oil prices.
Some clarification is required here, since historically oil and gas are traded in the world in completely different ways.
So, now the entire press, as well as respectable experts, are commenting hysterically on the rise in exchange prices for blue fuel. At the same time, forgetting that almost 80 percent of it is sold not through stock exchanges and other trading platforms, but under long-term and, as a rule, rigidly fixed contracts.
This is roughly what has now infuriated the Ukrainian leadership in its relations with Hungary, which, without any doubt, refused the unlucky gas workers from the "Square" in the so-called virtual reverse.
How can one not agree with Yulia Tymoshenko, the former Kiev gas princess, even if she is now sent to the political junk?
It is she, and not someone else, who has traditionally been considered the toughest of opponents, both of Gazprom's managers and the Russian leadership.
Photo: European People's Party / flickr.com
And she just recently called the eight-fold excess of gas prices over the cost of natural gas in Ukraine a huge scandal.
Against this background, the factors of Nord Stream, the OPEC agreements and the notorious depletion of European gas storage facilities after the difficult winter of 2020–2021, alas, do not impress your authors. How unimpressive are the references to the accident at the Gazprom plant near Novy Urengoy.
But there is a much more real influence on the situation with prices of such a piquant motive as the large-scale bluff of the United States over the supply of LNG (liquefied natural gas) to Europe. Europe can now only be glad that it did not manage to build hundreds of receiving terminals.
And this US bluff, we recall, became one of the catalysts for the sanctions campaign launched by the Republican administration of Don Trump. Please note that under Democratic President Joe Biden, no one even thought to close it.
Is there life without oil?
Photo: crudeoildaily
Almost for the first time in stories oil started to rise in price only after gas prices soared. Usually it was quite different - just all kinds of oil crises were the stimulus for the growth of gas prices. But it’s not just the XNUMXst century and the third millennium, but the just beginning post-pandemic era.
Recall that the OPEC + member countries went on to increase both production and export of oil back in the summer in order to bring down the price for it and reduce the pressure on the world economy. But last year, OPEC and those who joined it, including Russia, cut production by as much as 10 million barrels per day.
However, the fact that "most likely, everything will end with a sharp collapse", as some analysts say, is somehow hard to believe. Even taking into account the fact that many alternatives to oil and gas are now becoming economically much more attractive.
Let's not forget that over the past decades, too powerful a movement has accumulated in the world in favor of abandoning non-renewable energy sources. Among other things, such green ones, and in our opinion, simply “dark green”, elegantly led the German energy industry to a dead end, where there was a global rejection of the peaceful atom, it is absolutely unclear who is still beneficial.
In the same way, to force the authorities of at least one European country to abandon oil and gas, and even coal, has not yet been successful. The coming winter may well stimulate the return of the Germans to the not yet closed nuclear power plants. It is already clear that in the foreseeable future you will not be full of sun and wind, in terms of energy.
And the environmental harm from them, more precisely - from wind energy and solar panels, as it turns out, is almost more than from hydrocarbons. However, this is not even the point, but the fact that there is still not very much available oil on the planet.
It will be enough for thirty or forty years - already good, but for the sake of replacing oil, in the end, it is possible to take on the processing of billions of tons of plastic waste. Finally. This is where for the “greens” there is an immense field of activity.
Well, our readers do not need to be convinced that there is no big benefit from high oil prices even for countries like Russia. Expensive oil is almost inevitably expensive gasoline. With all that it implies.
Yes, high oil prices lead to the strengthening of national currencies such as the commodity ruble.
But who now, with the borders closed to most, actually needs a cheap dollar or euro?
Is there life without gas?
The situation with gas in the world, if you look into the future, is much more encouraging than with oil. And besides, there are very serious prospects for hydrogen energy. Nevertheless, it is mediocre to burn it - the same as depriving the next generations of the future.
At this particular moment, the state of affairs is very serious.
Gazprom reports that “the lag in terms of occupancy compared to last year is 22,8 billion cubic meters. m of gas. Only 62% of the volume of gas raised from UGS facilities in Europe in the last heating season has been replenished ”.
At the same time, the Russian gas concern, despite the sanctions and difficulties with the certification of Nord Stream 2, continues to increase gas exports abroad. But many industry experts are already saying that it seems that you can forget about cheap blue fuel, and forever.
Gas exchange prices in Europe have already risen above $ 1 per thousand cubic meters. The historical maximum in spring 000 was also exceeded, when abnormal cold weather in the countries of the Old World led to an unprecedented increase in both demand and prices.
Let us remind you that gas prices began to jump earlier than oil prices - right after the summer. Then everyone was shocked by the price range of 600-700 dollars per thousand cubic meters. Now on the agenda is already a thousand dollars.
Gas, we repeat, has come off and, it seems, finally from oil at prices, but not demand. And the demand from the Asian locomotives of economic growth - China and India, behind which also have Korea with Malaysia and Indonesia, as well as Japan, is not decreasing.
And this is despite all the opportunities that have opened up to buy raw materials bypassing the sanctions. Iran, Qatar and even Libya, no matter how scary it may seem to someone. By the way, Chinese and Indian businesses have become, in a sense, rescuers for the same American LNG.
The US gas workers reoriented themselves to new markets quickly, to the envy of the Russian and some others. But we must remember that these markets have always been more marginal, one might say, generally unpredictable, which also contributed to the rise in prices.
Returning to the more urgent topic of gas storage facilities, which we still do not consider to be key, we only note that the fact that they are now not sufficiently filled is primarily to blame for their owners. It was they who last summer refused to buy gas on a large scale, hoping that it would soon become cheaper.
But it did not fall in price.
And not only because of the problems of the Nord Streams: both the second and, oddly enough, the first, which still cannot be fully utilized. And mainly due to precisely those factors that have already been given at the beginning of the article.
And European consumers have to pay for the poor management of their energy companies. It is they who are now experiencing the negative consequences of the refusal of the European gas elite from pricing on the basis of long-term contracts with the Russian Gazprom. At one time, Hungary went against the whole of Europe, signed a series of agreements with Gazprom, and today is not worried about anything.
- Alexey Podymov, Victor Malyshev, Doctor of Economics
- pronedra.ru, cdn11.img.sputnik.by, gazovik.info
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