Home » Posts tagged 'energy price'

Tag Archives: energy price

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

We Are Going To See Energy Prices Go Absolutely Nuts This Winter Just As We Plunge Into A Horrifying Global Economic Crisis

July 27, 2022

We Are Going To See Energy Prices Go Absolutely Nuts This Winter Just As We Plunge Into A Horrifying Global Economic Crisis


How would you feel if your power bill went up by 50 percent this winter?  How about 100 percent?  Unfortunately, these kinds of price increases are already being announced.  The world was heading into a major energy crisis even before the war in Ukraine started, and now that conflict threatens to create an extremely severe energy crunch that would have been unimaginable just a couple of years ago.  If some sort of a miracle doesn’t happen, it is going to be a really, really cold winter for countless people in the western world.

The Russians have been trying to use energy as leverage, and on Monday they announced that the amount of natural gas flowing through the Nord Stream 1 pipeline will be reduced “to just 20% of its capacity”…

The Biden administration is working furiously behind the scenes to keep European allies united against Russia as Moscow further cuts its energy supplies to the European Union, prompting panic on both sides of the Atlantic over potentially severe gas shortages heading into winter, US officials say.

On Monday, Russia’s state-owned gas company Gazprom said it would cut flows through the Nord Stream 1 pipeline to Germany in half, to just 20% of its capacity. A US official said the move was retaliation for western sanctions, and that it put the West in “unchartered territory” when it comes to whether Europe will have enough gas to get through the winter.

In essence, Vladimir Putin is “turning the screws”, and it may just be a matter of time before he cuts off the gas completely.

The Europeans never should have allowed themselves to become so dependent on Russian energy, and now a major crisis is staring them in the face.

…click on the above link to read the rest of the article…

UK Natural Gas Prices Hit New High, Trigger “Marketwide Crisis”

December 22, 2021

UK Natural Gas Prices Hit New High, Trigger “Marketwide Crisis”

Update (1120ET): The latest jump in U.K. natural gas prices has been called a “national crisis” by multiple energy firms and industry groups in the country. They’re requesting the government protect customers and suppliers as critical Russian gas flows into Europe plunge, nuclear outages in France, and cold weather send gas prices to stratospheric levels.

On Tuesday, U.K. wholesale natural gas prices hit a new record high of 470p per therm (intraday). Prices have since eased to 451p per therm.

FT spoke with London-listed Good Energy, EDF Energy, and the trade body Energy U.K. about the alarming situation in the country as the winter in the Northern Hemisphere begins.

“This is a national crisis. Wholesale gas and power prices have increased to unprecedented levels over the last three weeks, creating an extremely difficult operating environment for every business in the industry,” said Nigel Pocklington, CEO of Good Energy, a small renewable energy supplier.

EDF Energy, the fourth-largest supplier in Britain, said high natgas prices are sending power prices skyrocketing, and it’s “critical” for the government to “act now to support energy customers.”

Emma Pinchbeck, chief executive of Energy U.K., said Britain faces “a marketwide crisis.”

“Other Treasuries in Europe have already responded to the crisis, but in the U.K., the energy sector is still asking if the chancellor knows that energy bills going up by over 50 percent in the new year is a problem for ordinary people, businesses, and the economy,” Pinchbeck added.

U.K. lawmakers are in panic mode to protect households by possibly capping power bills. The same is true for other politicians across Europe.

Where there is a crisis, there is always a huge opportunity. We explained yesterday, in a note titled “Commodity Traders Find Huge Arbitrage Opportunity As LNG Ships Head For Europe,” that extraordinary high European premium on gas has made it an arb trade of a lifetime.

…click on the above link to read the rest of the article…

From Bad To Worse: Another French Nuclear Reactor Cuts Output Due To Strike

December 21, 2021

From Bad To Worse: Another French Nuclear Reactor Cuts Output Due To Strike

France’s energy crisis worsened overnight when another nuclear power plant had to reduce electricity output. Power prices jumped as the government requested one of the largest utility companies to restart more nuclear reactors amid cold weather.

Following last week’s shuttering of two nuclear power plants by Électricité de France S.A., commonly known as EDF, a French electric utility company primarily owned by the state, after safety inspections found cracks in at least one nuclear reactor, another one was closed Monday due to a worker strike.

EDF said an unplanned outage at the Bugey Nuclear Power Plant in eastern France was due to a strike. Output at reactor four was cut from 800 megawatts to 180 megawatts.

France’s grid remains under pressure due to the recent nuclear power plant loss. The day-ahead power price rose to the highest level since 2009 on Sunday and was priced even higher on Monday.

European natural gas climbed above 143 euros.

At least 25% of the EDF’s 56 atomic reactors are offline for maintenance. For some context, this is highly unusual for this time of year, considering the Northern Hemisphere winter is about to begin. A cold spell has sent much of the country into a deep freeze as power demand soars.

Like everywhere else in Europe, the power crisis in France has worsened Monday as power prices from France to Germany are at elevated levels.

German power prices hit a record on Monday.

France’s Ecology Minister Barbara Pompili has called on EDF to restart some nuclear power plants to avoid blackouts.

“I asked that EDF employees work to reopen them earlier in order face any possible shortages,” Pompili said.

Temperatures are forecasted to hover around zero degrees Celsius in several European countries this week as the power crisis across Europe worsens.

Inflation Soared to 6.8% in November

December 13, 2021

Inflation Soared to 6.8% in November

Inflation is soaring with no end in sight. The Consumer Price Index rose 0.8% in November, marking a 6.8% increase in inflation YoY. According to the Labor Department, this is the fastest pace of inflation since June 1982. In addition, Core-CPI rose 0.5% last month, amounting to a 4.9% annual increase, the quickest advancement since 1991.

Energy prices alone have spiked 33.3% in the past year, and gasoline prices are up 58.1%. Over the past 12 months, food and energy prices rose at the most rapid pace in 13 years. Shelter costs, amounting to one-third of CPI, rose 3.8% on an annual basis. This level has not been seen since the 2007 housing crisis wreaked havoc on the US real estate market.

Despite pay increases of 4.8% this year, real hourly earnings decreased 1.9% over the past 12-months. Service costs rose at the fastest pace since 2007 as well, advancing 3.4% over the past year. Apparel costs are also up by 5% since last November. Everywhere you look, prices are drastically rising.

Overall, the cost of living is astronomical. Basic necessities such as food and shelter price increases have caused more middle-class Americans to begin living paycheck to paycheck. The Federal Reserve claimed it would step in if inflation reached an unsustainable level. A 6.8% increase is unsustainable, inflation is not transitory, and neither the government nor the Fed has made a valid effort to control this growing problem.

Biden’s New “Regressive” Methane Tax Will Raise Average American’s Gas Bill By 17%: Op-Ed

December 12, 2021

Biden’s New “Regressive” Methane Tax Will Raise Average American’s Gas Bill By 17%: Op-Ed

At a time when the Biden administration is panicking in an attempt to keep energy prices down, the House has slapped a “fee” on methane that is being called a “stealth tax” on natural gas and everyone who uses it.

The House bill results in an “escalating tax on methane emissions by oil and gas producers,” a new op-ed in the Wall Street Journal points out. The tax will hit $1,500 per ton by 2025 and the fee is supposed to be a contribution to recent promises made in Glasgow to curb methane emissions.

The cost of the fee will obviously get passed along to the consumer, which will then result in even higher energy prices than consumers are already struggling with. 180 million  Americans use natural gas to hear their homes, the report says.

Soaring energy prices in Europe are forcing U.K. factories to shut down

September 25, 2021

Soaring energy prices in Europe are forcing U.K. factories to shut down

Europe is facing an extreme squeeze for energy supplies, with gas and power prices breaking records day after day

Europe’s energy crunch has forced a major fertilizer maker to shut down two U.K. plants, the first sign that a record rally in gas and power prices is threatening to slow the region’s economic recovery.
CF Industries Holdings Inc. said Wednesday it’s halting operations at its Billingham and Ince manufacturing complexes due to high natural gas prices, with no estimate for when production will resume. European gas and power futures tumbled Thursday on signs energy-intensive industries are curbing consumption.The move comes as Europe is facing an extreme squeeze for energy supplies, with gas and power prices breaking records day after day. The continent is running out of time to refill storage facilities before the start of the winter as flows from top suppliers Russia and Norway remain limited. There’s also a fight for shipments of liquefied natural gas, with Asia buying up cargoes to meet its own demand.

The crisis could have severe economic consequences. Soaring prices are exposing the risk of power outages this winter, according to Goldman Sachs Group Inc. Blackouts would likely send energy prices even higher, compounding concerns about inflation and adding to the rising costs businesses are already shouldering for raw materials.

CF has so far taken the most drastic move of companies operating in the region, but others are warning of the likely blow-back.High energy prices are creating “inflationary pressure on every other cost” that will end up being passed on to customers, said Pascal Leroy, senior vice-president of core ingredients at Roquette Freres SA, a food processing company based in northern France. And France’s top sugar producer, Tereos, warned of surging natural gas prices raising production cost for the company “tremendously.”

…click on the above link to read the rest of the article…

Chevron CEO Warns “New Dynamics” To Boost Energy Prices Amid Global Supply Crunch

September 16, 2021

Chevron CEO Warns “New Dynamics” To Boost Energy Prices Amid Global Supply Crunch

Soaring energy prices are stoking new concerns about a stagflationary environment of high prices and waning economic growth. Natural gas prices in Europe and the US are through the roof, and WTI futures are over $70 per barrel.

Chevron Corp.’s CEO Mike Wirth spoke with Bloomberg on Wednesday and warned about elevated prices due to tightening supply. He said oil and gas companies are holding back on drilling new projects.

“There are things that are interfering with market signals right now that we haven’t seen before. Eventually, things work out, but eventually can be a long time,” Wirth said.

He said although commodity prices are moving higher, “signaling, we could invest more,” equity prices are sending mixed signals.

“There are two signals I’m looking for, and I’m only seeing one of them right now,” he said. “We could afford to invest more. The equity market is not sending a signal that says they think we ought to be doing that.”

Wirth added that shareholders would rather see cash returned to them than invested in new or existing drilling projects. Investors are cautious about plowing billions of dollars into low-return projects. They are also concerned about climate change initiatives targeting energy companies to reduce carbon emissions that would hurt future returns.

“You’ve got some real new dynamics, whether it’s government policy, efforts to constrain capital into the industry, to make it harder for the industry to access capital markets,” Wirth said. “That is the short term could create some risk for the global economy.”

…click on the above link to read the rest of the article…

IEA: Expensive Energy Is Threatening Economic Growth

October 12, 2018

IEA: Expensive Energy Is Threatening Economic Growth

oil jack

Expensive energy is back and it is threatening global economic growth, the International Energy Agency (IEA) said in its Oil Market Report on Friday, joining other organizations like the International Monetary (IMF) and OPEC that also expressed this week concerns about mounting challenges to economic and oil demand growth.

Brent Crude prices have been holding above $80 a barrel, while pipeline constraints have caused WTI Crude prices to lag somewhat, the IEA said in its report, but noted that “Nonetheless, our position is that expensive energy is back, with oil, gas and coal trading at multi-year highs, and it poses a threat to economic growth.”

Emerging economies are grappling not only with higher energy prices, but they are also seeing their currencies depreciate against the U.S. dollar, which increases the threat of economic growth slowing down, the IEA said.

Earlier this week, the IMF slightly downgraded its projection for global growth for this year and next—at 3.7 percent, growth is now expected 0.2 percentage point lower than IMF’s forecast from April this year. The key reasons for the downgrade included trade disputes, geopolitical tensions, and a weaker outlook for emerging economies due to higher oil import bills, among other factors, according to the IMF.

On Thursday, OPEC revised down its oil demand growth estimates for this year and next—a third downward revision in three months—citing potential headwinds to global economic growth ranging from trade disputes to weakening finances in emerging markets and geopolitical challenges. OPEC revised down its global oil demand growth to 1.54 million bpd this year, down by 80,000 bpd from the estimate in the September report. The cartel now sees global oil demand growth next year at 1.36 million bpd, down by around 50,000 bpd from last month’s assessment, to reflect expectations for lower economic growth for Turkey, Brazil, and Argentina.

…click on the above link to read the rest of the article…

How energy shortages really affect the economy

August 28, 2018

How energy shortages really affect the economy

Many people expect energy shortages to lead to high prices. This is based on their view of what “running out” of oil might do to the economy.

In this post, I look at historical data surrounding inadequate energy supply. I also consider some of the physics associated with the situation. I see a strange coincidence between when coal production peaked (hit its maximum production before declining) in the United Kingdom and when World War I broke out. There was an equally strange coincidence between when the highest quality coal peaked in Germany and when World War II broke out. A good case can be made that inadequate energy supply is associated with conflict and fighting because leaders recognize how important an adequate energy supply is.

Some of my previous analysis has shown that if we view energy in terms of average energy supply per person, the world as a whole may be again entering into a period of inadequate energy supply. If my view is correct that inadequate energy supply leads to increased conflict, the recent discord that we have been seeing among world leaders may be related to today’s low supply of energy. (My energy analysis considers the combined energy supply available per person from fossil fuels, nuclear, and renewables. It is not simply an oil-based analysis.)

The physics of the low energy situation may be trying to “freeze out” the less efficient portions of the economy. If successful, the outcome might be analogous to the collapse of the central government of the Soviet Union in 1991, after oil prices had been low for several years. Total energy consumption of countries involved in the collapse dropped by close to 40%, on average. The rest of the world benefitted from lower oil prices (resulting from lower total demand). It also benefitted from the oil that remained in the ground and consequently was available for extraction in recent years, when we really needed it.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
Click on image to read excerpts

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress