For anyone wondering: still significantly above the pre-war price
This brings the continent closer to the traditional patterns seen before the pandemic when prices, sustained by Russia's abundant and cheap deliveries, used to reliably range between €15 and €25 MWh.
From a personal perspective, my restaurant energy bill (gas/electric) went from peak season August 1350€ last year to less than 800€. Anecdotal, but I absolutely needed to see lower pricing this year.
From what I understand (I may be understanding little), Saudis responded opposite the western requests and seemingly in coordination with Russia cut output, and have been cutting output. Driving up energy prices and overall inflation. There seems to be some power play happening between the Saudis and Biden if I am reading the news correctly.
Yes, there's an oil war going on between the US and Saudis + Russia.
A lot less catastrophic than what had been announced.
The US was in a good position to take on a lot of these contracts and the Biden administration, despite what the right might think, is actually extracting more domestic O&G than at any point. The shift is also that when oil prices climb high enough it makes shale production profitable enough to actually extract. I don't see how it falls back to pre-war levels but the US can also more than make up for the demand with a high enough price per barrel. I think much under $50 a barrel of NYMEX, most of the US producers stop operating.
Any relief we might get as customers - be sure they're still gouging us for record profits.
They've seen just how much they can get away with, they're not going to go back.
Same thing as with food prices at the store. They found out they can get away with reducing the content and doubling the price. This will now go on for conceivably future.
No it's not a good comparison. The bulk food prices themselves are indeed sold on a similar commodity market, but the pricing of packaged goods is marked by companies selling those packaged goods. Oil and gas are sold at the rates bought and sold through futures contracts directly from the producers. You're paying the rate the traders got it for, usually with a regulated mark up. If you're buying from a private utility then you're on your own buddy.
Good lord that isn't how commodity prices work. There's no cabal with complete control over global oil and gas prices. There are groups with varied interests depending on the amount and quality of oil they possess, but even that gets complicated. It boils down to what is on the market and how it's bought and sold on contracts by global energy traders. Yes, OPEC and Saudi Arabia have some power over prices by increasing and decreasing supply on the market, but that's been reduced with how much supply has come online over the years in the US and Canada. Russian supply cuts to Europe had a pretty obvious ripple effect, but after a year or so, supplies and relative demand have shifted. This reductionist take is so tiring and is such an obvious sign of lack of understanding how commodities markets, and quite likely economies themselves, actually work in the real world. It sounds almost as crazy as the right wing conspiracies about global cabals.
Companies are driven by humans. And humans do greed very well. And our system is excellent at lifting up the greediest ones to the positions of power that could maybe not form the cabal. But do the 'human see other earn more, human do' thing.
Companies are driven by capitalism. And capitalism does greed very well. And capitalism is excellent at lifting up the greediest ones to the positions of power that could maybe not form the cabal.
FTFY
capitalism hasn't gotten all of us (not sure what that last sentence means, but if you're implying envy of those literally holding humanity ransom for profit, you could not be more wrong, but you are telling on yourself) nor is the behaviours it encourages and breeds "natural":
https://theconversation.com/humans-arent-inherently-selfish-were-actually-hardwired-to-work-together-144145
How is it telling, and of what? I think I got a good grasp of the socioeconomics of capitalism, and how it is moving our society in a (for me unwanted) direction.
And I agree, we humans are naturally wired to cooperate. However, unfortunately also by nature's design, we humans are all on a bell curve. The x-axis in this case is empathy/greed. And since we are with 8 billion, we got a lot of people that can land on either end tails of this curve.
I am just claiming that our current economic system encourages greed and lack of empathy. And has the tendency to get these greedy people on the tail end in positions of money. And unfortunately, in capitalism money=(political) power.
And please, don't deny the existence of people that have sociopathic or psychopathic tendencies. Those that do not feel social obligations beyond what they self require. That do not have the sympathetic wiring we all have on top of the bell curve.
And don't deny that corporations in capitalism aren't led by HUMANS. It is always a bunch of humans making calls about their policies and practices. They could decide any time to do better, but just don't.
Some are either born with a lack of empathy in their genes, or are raised to have all empathy be purged out of them. Or simply be given the idea that others below them don't deserve their empathy.
We would have a much more empathetic and social world if we were not susceptible to either not having or losing our empathy. And let greed fester.
My last sentence was about this uplifting mechanism. I was trying to neither confirm nor deny the existence of a cabal. I totally see that a cabal existing is most likely. But I also have fallen for the pit called 'attributing malice to incompetence and stupidity' many times which has left me in miserable states of mind that are not healthy or productive for change. To not just assume total organized malice: I just assume jealousy and greed of those who can actually make decisions on pricing.
That the greedy nature that some of us have, and many more have the higher you go in a corporate ladder. Those some that also have a tendency to rise up in our capitalistic society, are sometimes selfish self centered humans. That do get jealous that other peers are earning more than they are. That their company is not part of FANG. That they think they deserve the same, or even more, as they work 'so hard, harder than anyone else'. While just blatantly being out of touch with what actual hard work is.
That is my stance. Maybe a little too condensed to just 'monkey see, monkey do'.
BTW, I do believe this is also a problem with communism. That it has never been able to progress beyond the 'oppression of the proletariat'-aka dictatorship-stage. Because there are always some people who see themselves as more important, or more equal, than others and deserving of more power or rewards than others. They also have a hard time letting go of that power. It takes just a few in positions of power, and the dictatorship is set to last and never transition to the stage beyond dictatorial-communism.
Very fair take on moral philosophy, but what does that actyally have to do with how commodity prices work??
That we humans have made up money, and the market. That the notion of the 'invisible hand of the market' being an unbiased force, is actually a bunch of humans who have their vices and virtues move that hand. We have a system that tends to raise people up that are more greedy. Those that justify the existence of 'catch-up profits' to correct lost margins.
This is the best summary I could come up with:
The numbers seemed to be in the grip of an irrepressible force: August 2022 began with the Title Transfer Facility (TTF), Europe's leading hub, trading gas at €145 per megawatt-hour (MWh), an alarming level.
The headline, while dramatic, encapsulated the atmosphere of uncertainty and anxiety – a polite euphemism for hysteria – that characterised the worst times of the energy crunch, an unheard-of phenomenon unleashed by the COVID-19 pandemic and exacerbated by Vladimir Putin's decision to launch a war against Ukraine.
But today, a year later and with the benefit of hindsight, we can: after hitting the €300 MWh ceiling, Europe's gas prices began a steady decline and fell back to double-digit territory.
The drastic turnaround represents one of Europe's greatest feats since the Kremlin ordered its troops to cross into Ukrainian territory and irreversibly transformed the long-established structure of global energy markets.
Although policymakers in Brussels have been quick to congratulate themselves on the geo-economic victory, the key to success lies in an intricate combination of factors, including a milder-than-usual winter that dented demand for heating.
As we turn the tide and leave the panic behind, the expert adds, governments should phase out the massive subsidies they put in place during the crisis and instead focus on targeted support for the most vulnerable sectors of the population.
The original article contains 814 words, the summary contains 218 words. Saved 73%. I'm a bot and I'm open source!
all it cost them was shutting down their industries to use less gas to keep gas prices low
Also this is in the end of summer, when prices are going to be their lowest.
Plus whatever the cost is these days of Russian gas bought from India
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