Low demand is part of the reason why the prices have come down recently, but the problem is that LNG pricing is volatile and LNG simply can’t be delivered in the same volumes as pipeline gas. Meanwhile, Russia is selling oil at a discount to both India and China. India then resells the oil to Europe at a markup. Russia is also expanding their gas pipelines to China as we speak.
Again, if you don’t believe me, then just wait and see where things are next year.
So you think that the biggest thread energy wise is the votality of lng? I believe that this is a problem, and if it’s true it may lead to another crisis in winter.
But right now the storage is nearly full, so if the winter is weak there will probably no shortage of gas and no problem in winter.
I thought that you had a different reason that will more likely (say >70%) cause more chaos in winter.
There are several issues here. First, LNG prices are volatile which makes it problematic for the use in the industry. If you’re doing manufacturing, you can’t have your input costs fluctuating all the time. Second, LNG capacity is much lower than pipeline capacity even when accounting for storage. So, overall available energy is lower. Third, there aren’t a lot of LNG terminals available at the moment, so it’s not possible to process LNG quickly if demand rises.
All of these problems make it difficult for industry to operate in Germany, and hence why we’re seeing it moving out of Germany right now. As the industry leaves that means jobs are going to be disappearing leading to higher unemployment, and economic activity will slow down because people are going to be saving money. This is the real concern for Europe and Germany in particular.
