Consequences Of Brexit [Part 9] Read First Post Before Posting

[Guest sibon]

2 hours ago, West 77 said:

What have you bought?  A lorry load of logs?

Close enough, but more than one.

[Guest sibon]

3 hours ago, Gormenghast said:

That would suggest that the global market prices would drop in times of peak demand.

 

Doesn't work like that.

No.

 

It suggests that buyers placing larger orders can obtain better prices.

 

A lesson that the UK is slowly learning.

[Gormenghast 59]

1 hour ago, L00b said:

Why would it?

 

You have reducing demand, now aggregated from a single buyer, chasing whatever level of global supply -minus Russia- is available. So, same situation as right now, with less fragmentation on the demand side.

If you have to chase, that means there's limited supply, which in the global market means prices tend to rise doesn't it? And the Russian actions only exacerbate the supply shortage.

 

Im not sure there's  a reducing demand either. Some countries are attempting to reduce their reliance due to high prices and supply shortages, but that will hardly affect global demand. 

Edited August 4, 2022 by Gormenghast

[L00b 441]

1 hour ago, Gormenghast said:

If you have to chase, that means there's limited supply, which in the global market means prices tend to rise doesn't it? And the Russian actions only exacerbate the supply shortage.

 

Im not sure there's  a reducing demand either. Some countries are attempting to reduce their reliance due to high prices and supply shortages, but that will hardly affect global demand. 

I used ‘chase’ as a figure of speech.
 

Russian actions (well, collective actions and sanctions against those, plus Russia’s own deliberate supply cuts) certainly lead to a supply  shortage.
 

Likewise emergency collective policies and decisions, mostly by EU member states (maybe also the UK?), certainly lead to a reduced demand. 

 

The problem you have with gas, is that you can’t barrel it up like oil: gas in any serious volume, is only getting bought and sent via pipes. So whatever Russia isn’t selling to EU countries anymore, isn’t getting bought and sent elsewhere.

 

None of this has anything to do with Brexit, that said. So that was a nice diversion 😉

Edited August 4, 2022 by L00b

[L00b 441]

2 hours ago, West 77 said:

Nonsense.  You have more demand for what gas is available globally.  The global supply of gas has to increase for reducing demand to occur.

Still not moved to North Korea, then?

 

Assuming that you meant “there is more demand than global gas supply can meet”, you’re going to have to prove that.

 

Good luck with it, as currently there isn’t “more” demand, there is actually less, because Summer in the northern hemisphere. Which explains how EU countries are still managing to stock up in readiness for this winter, notwithstanding Russia’s stranglehold on the supply,

 

Next, increasing supply does not “reduce” demand: it meets whatever level of demand there is, higher or lower at any given time, faster.

[Litotes 63]

4 hours ago, West 77 said:

Countries buy gas in advance of when it's most needed.  You don't understand the laws of supply and demand.

But you don't understand economics - if everyone bought ahead of when it's needed, then highest demand is ahead of when its needed.

Therefore the highest supply is at the point of highest demand, not highest need.

 

Go back and read Economics 101

8 hours ago, West 77 said:

Nonsense.  You have more demand for what gas is available globally.  The global supply of gas has to increase for reducing demand to occur.

No - more lies (or ignorance) from West 77.

During the pandemic, the supply of petrol didn't go up, the demand went down... and the same can apply to any commodity.

 

Like I said - back to Economics 101

[El Cid 218]

8 hours ago, West 77 said:

Countries buy gas in advance of when it's most needed.  You don't understand the laws of supply and demand.

The UK got rid of most of our gas storage. Buying gas in the summer, before the winter demand, would have been a good idea.

Deregulation I guess.

[Mister M 1,625]

Probably a bit off topic, but continuing the theme of energy prices, I was listening to the radio yesterday, and quite a few callers (including one from someone who worked in the industry) were saying that the energy companies buy at least a year in advance. So companies are charging the consumer present prices than when they bought it cheaper. Pure profiteering I would've thought.

 

[El Cid 218]

2 hours ago, Mister M said:

 a few callers (including one from someone who worked in the industry) were saying that the energy companies buy at least a year in advance. 

That doesn't sound true, what radio program was it?

[RJRB 688]

2 hours ago, Mister M said:

Probably a bit off topic, but continuing the theme of energy prices, I was listening to the radio yesterday, and quite a few callers (including one from someone who worked in the industry) were saying that the energy companies buy at least a year in advance. So companies are charging the consumer present prices than when they bought it cheaper. Pure profiteering I would've thought.

 

Not a very sound understanding of the reasons behind buying forward to ensure supplies.

Buying forward applies to most commodities from metals to grain etc.

There s always a judgement to be made as to whether spot prices will be higher or lower in the future.

The gamble element is windfall profits or sustained losses but the intention is to provide some future certainty.

.

[Mister M 1,625]

46 minutes ago, El Cid said:

That doesn't sound true, what radio program was it?

Shelagh Fogarty on LBC

[El Cid 218]

1 hour ago, West 77 said:

https://www.gov.uk/government/news/uk-gas-supply-explainer

It states many months in advance, I wonder if that includes Russian or Ukrainian gas?