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Will the consumer ever benefit from price drops? Europe has more natural gas than it knows what to do with. So much, in fact, that spot prices briefly went nega
by DrNosferatu 4y ago
Will the consumer ever benefit from price drops? Europe has more natural gas than it knows what to do with. So much, in fact, that spot prices briefly went negative earlier this week.
- jerf 4y agoIt does and it doesn't. It has full storage, but almost certain prospects of using it faster than it can be replaced in storage this winter, and as anyone running a gas station knows you have to sell your gas at prices that allow you to replace it in the future, whatever your prices may nominally be today. Those negatively prices literally can't flow to consumers, there's no path for that, just like there wasn't one for when oil in the US went negative in the commodities market. Europe is still in huge energy trouble; this "their tanks are full" is still ultimately bad news, not good news, because even at full, it's quite likely not enough. The zeroth derivative of quantity looks good but the first and second are very dangerous. I suppose this is a good example of the importance thinking in derivatives and higher orders, not just the zeroth-order fact of the moment.