Thursday 21 July 2011

If there is a global gas GLUT, why prices rise?

Ian Marchant, Chief Executive of HSE, told the Daily Telegraph that people are confused the abundance of gas to United States with a difficult situation of supplies in Europe.

Britain still gets about one-third of its inland North Sea gas, half of the rest of Europe via pipeline and 15pc via tanker form liquid.

Operational problems with liquefied natural gas (LNG) shipped from Qatar, the flow of gas in the Middle East to Asia, where customers are willing to pay higher prices and the increase in demand following the recession, have combined to push up to UK 25pc price this year.

There is some merit in these arguments.For example, just because the world has a surplus of cheap labour, does not mean that the United Kingdom cannot be far from unskilled workers.

But the image always account for the discrepancies between how energy suppliers seem to wait longer to cut prices they do before their livestock.

Britain is well supplied with gas, according to the National Grid and is poised to take its first shipment of U.S. natural gas liquefied this week at the station of the island of grain.Tous signs are that wholesale gasoline prices should be stagnation – or even collapse.

As a result, many observers are struggling see why retail prices should also be higher now than they were during much tougher wholesale price spikes.

"There is no obvious reason why energy companies should raise retail prices this winter," said Andrew Horstead risk analyst of Utilyx. "The market is well supplied and prices increased in depressions which we have seen in March, but they remain well below historical levels for this time of year.»

While the Fed is committed to freeze prices in March, Chief Executive of another major supplier said Daily Telegraph was likely to follow British gas and of SES lead in raising invoices, arguing that the prices are one-third higher than they were in 2007.

A part of the problem by working on the reasons why rising gasoline prices at retail is the lack of transparency surrounding how vendors get their gas and the price they pay for it.

Providers argue that they buy gas coming months - perhaps up to one year on the futures market - and therefore their costs of commodities not necessarily follow spot market prices.

Consumers are therefore taken hostage by their provider effectiveness is to cover.SES would admit this week that it had been less effective predict which way would be the price of gas, leaving at a loss in its sales activities at retail for the first half of this year.

"For me, it raises questions about how HSE target their procurement strategy and presentation how they are large wider energy market", explains Mr. Horstead.

There are signs that the overabundance of gas will compel the prices lower in Europe, where the market is scheduled by opacity even more than the more liberal model of Great Britain.

Major suppliers Europe have recently been pressure increasing gas giant Gazprom and total to start offering gas contracts linked to the spots, prices that are below the 30 year contract prices coupled with price 50pc.Prix oil immediate are so low due to the overabundance of gas.

Paul Newman, head of energy at AIP, the current broker, believes that the market is at the edge of a revolution.

"Much of what we see on the European markets for natural gas is the same as what we saw in the oil market in the years 1980 and 1990," he says. "Second shock in 1979 led to contracts of fixed price/fixed-supply and led to an explosive growth in the use price market, such as the cash price references.»

Everything should be good news for UK consumers at retail, gas that Britain depends in part on supplies by channelling of the continent.

The United Kingdom remains vulnerable to shocks in the short term as the flow of pipeline limited indirect Russia across Europe and the supply disruption of the North Sea.

In General, the overabundance of gas will mean gas inférieures.Il invoices but just was still too much sign of that.RM

Rubber prices have this week reached a maximum of 30 years, causing tire manufacturers increase their prices by 15pc 10pc.

Futures on the point of guide Tokyo products index is over $ 4,661 per tonne, their most top since February 1980 and Thailand cash prices climbed to a record historique.Prévision rain is likely to aggravate a shortage of supply and Chinese inflation boosted demand in the commodity sector.

ProSpreads technical analysts: ' "the fundamental reasons for recent gains rubber are clear and obvious: increased sales of cars in China, coupled with bad weather in Southeast Asia, squeezing more supply it should be a courageous speculator to sell at this gathering." "

Copper has continued its rally hit a record in London and a maximum of 30 months in New York.

Chinese demand - that never - fueled base metal prices after that industrial production increased by 13pc one year earlier.

On the London Metal Exchange, copper for the delivery of three months reached $8,966, exceeding the previous peak set in July 2008.

However, the Commerzbank analysts noted that China is now reduce imports. ""This could put price of copper under pressure," they said.


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