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Tue Sep 14, 2021, 07:58 AM

Europe's record-high gas and electricity prices are a taste of what's in store for global commodity

Europe's record-high gas and electricity prices are a taste of what's in store for global commodity markets, Goldman Sachs says

- Europe's soaring energy prices are a glimpse of what's next for a range of commodities, Goldman Sachs said.

- Benchmark gas and electricity prices in Europe have exploded as supply struggles to keep up with surging demand.

- Goldman Sachs said the S&P GSCI commodities index is likely to rise 11% over the next 12 months.

...

The US has also seen natural gas prices rise sharply, and the benchmark Henry Hub price is at its highest level since 2014. WTI crude oil breached $70 on Monday as supply struggled to rebound from Hurricane Ida.

Goldman's analysts said inventories in nearly all physical goods, from US cars to Chinese copper cathodes, are declining sharply as pandemic restrictions lift, and people go out and spend.

https://markets.businessinsider.com/news/commodities/europe-gas-electricity-price-surge-commodities-markets-shortages-goldman-sachs-2021-9

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Response to Klaralven (Original post)

Tue Sep 14, 2021, 08:01 AM

1. Well, we better start putting a lot more into natural energy sources, then.

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Response to Scrivener7 (Reply #1)

Tue Sep 14, 2021, 08:13 AM

2. Not the best timing for that argument

Their current issue stems from unusual weather resulting in far less electricity generation from wind power (and, of course, solar generation is on the decline). This has resulted in unusual demand for gas-fired generation - which has driven up gas prices as supplies plummet… resulting in coal plants being restarted.

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Response to FBaggins (Reply #2)

Tue Sep 14, 2021, 08:19 AM

3. Yes, I know that. And that doesn't make me suspicious at all. The argument that the

wind has stopped all over Europe is a little suspect, though.

When oil and coal became more difficult to access, we simply subsidized the crap out of them and threw money at the problem so we could find new ways to access oil and coal.

Somehow, we don't seem to have the same attitude toward solar and wind.

I wonder why that is.

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Response to Scrivener7 (Reply #3)

Tue Sep 14, 2021, 08:33 AM

4. You think that wind energy producers are intentionally cutting production?

And the weather stations are lying?

All to artificially drive up gas prices?

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Response to FBaggins (Reply #4)

Tue Sep 14, 2021, 11:04 AM

8. No. But I am also not buying the inferred argument that "The wind went away and therefore

renewables are not viable and there is no long term solution but to go back to fossil fuels and this short term price increase in fossil fuels is a DISASTER!!!" And who do you think might be behind such an argument?

Fossil fuel prices fluctuate. So do renewable fuel prices.

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Response to Scrivener7 (Reply #8)

Tue Sep 14, 2021, 11:30 AM

10. That isn't the argument that the is implied by the current scenario

Last edited Tue Sep 14, 2021, 12:45 PM - Edit history (1)

The "disaster" (to the extent there is one) isn't from the move away from fossil fuels. It's from moving away from some fossils (i.e., coal) and nuclear at the same time and overly toward specific renewables that required other fossil (i.e., gas) with less local availability.

In this case, gas supplies are pinched by increased global demand and lack of sufficient local production while wind is simultaneously struggling from it's own lack of "fuel" supply. I haven't read of any cloud cover issues, but solar is naturally lower in production in mid-September than in May or June.

Lack of generation diversity is a foreseeable problem when you focus on just a couple of preferred sources. That doesn't mean that one source or another is not "viable", but it does mean that there are consequences.

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Response to Scrivener7 (Reply #3)

Tue Sep 14, 2021, 08:59 AM

5. All over Europe doesn't have he 20 mph average wind speed of the North Sea area

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Response to Klaralven (Reply #5)

Tue Sep 14, 2021, 11:00 AM

6. And it never did.

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Response to Klaralven (Original post)

Tue Sep 14, 2021, 11:03 AM

7. I hope not. But Europe has always had high gas prices...Democrats will lose and by large

numbers if this happens as we will be blamed unfairly. Then bye-bye any climate change legislation.

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Response to Klaralven (Original post)

Tue Sep 14, 2021, 11:11 AM

9. Our infrastructure plan is for 80% sustainable BY 2030 and 100% by 2035.

That will be for adequate supplies, of course, but this suggests popular demand for improvements to our energy infrastructure (i.e., more supply) should increase.

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