For all you LNG / oil market watchers, I present you the quote that is going to end all quotes. The Strait is open, apart from the thing that means it is not open. Oil prices should be $200bbl due to this quote alone.

JKM is currently at a premium to TTF so more likely the Chinese cargoes are off to South Korea. My joke has been destroyed by market forces.

Reloaded Chinese LNG cargoes (of probably Australian origin) just serenely chugging past the entrance to the Strait on the way to European terminals, giving a cheery wave. Serious point coming up below...

Graph of the day alert. Stolen from @davidawatson.bsky.social on LinkedIn. The way the price cap works; the longer this goes on, the closer that dotted line will get to the coloured lines, and the further higher the p/kWh rate will go for standard variable tariffs.

Compared to 2022, the gas side of this crisis is translating differently to power. *This is just a snapshot alert* but look at these recent days in GB wholesale markets. Gas at ~£40MWh, power at £50-60/MWh - that power price is barely/not covering the cost of burning gas. So what's going on?

Wow, an article that says to 'break the link', and then explains how that would be done. Big admiration for that, I do not have to tap the sign! The idea needs interrogation (a mix of market bifurcation with an 'Iberian exception' twist?), but fair play. www.theguardian.com/commentisfre...

I'm not sure this is going to be an energy price 'spike' shaped crisis, guys. Going to have to go dust off the 'table mountain' analogies & 'high energy price plateau' explanations on this report.

Many areas of the world experienced this in gas just a couple of years ago. Europe was writing (state funded) blank cheques like it was going out of fashion, and places like Pakistan couldn't get an LNG shipment as the ability to pay evaporated. Wonder want happened there? Read below...

I don't think he is on BlueSky (used to be on Twitter) but that is a yellow card to Nigel Pocklington (CEO, Good Energy) on LBC Radio just now.

About a month ago, DESNZ decided how it was going to try and cool the returns to Renewable Obligation backed renewables (broadly they receive wholesale + an additional ROC payment). It looks awful now RO assets are going through another cycle of creaming increased wholesale returns.

Dunno what you're all so worried about, you know Mother Nature is European, right? She'll sort us out. Oh look, warm and windy weather coming from the 11th. Enough of this nonsense she says, just all this fuss is too much.

This is actually terrible for oil long term. Conspiracy theories will be like 'Exxon, Shell, BP are loving this'. I can assure you, the whole game in oil is to keep prices useful to the economy and not incentivise the obvious substitutes (which just happen to be clean). That's why OPEC exists.

Just remember: no matter how bad you think this chart looks, it's worse in product markets (especially diesel). Happy new week everyone.

We're approaching full bingo card of nonsense articles.

Every economist screams. Again. Instead of subsidising consumption, to keep bills vaguely similar, subsidise reducing demand. A huge missed opportunity the first time round when the government did nothing until it utterly had to, and was left with one lever... helicopter money.

Here comes the market. It never fails. On the left: US LNG shipments reaching ever greater highs. On the right: European storage withdrawals all but ending. (ok, bit more weather related that one, but price signals play a part)

1st para: Yep, believe that. 2nd: Erm, ok, maybe. Seems far fetched. 3rd: Are you high? Been the non-existent threat for the last 4 years. The Asian markets just substitute. 4th: OK, we're back on Earth. 5th: Agreed. It's like a bell curve of mental thoughts.

My theory: Macro people look at crude markets (over supplied, fairly benign) Energy people look at product markets (oh god did another refinery just blow up?)

Good thread to get a grounding in respect to gas setting the price, but below shows exactly why anyone who says "just break the link to gas" is at best uniformed, at worst completely silly. It is really not hard to guesstimate the SMRC of gas. So what does this mean? Well...

Stolen graph (credit bottom right), but seemingly the 'market' wasn't great at predicting events last weekend, with a lot of short TTF positions in play. Suggests at least some of the crazy price action on Monday/Tuesday was short covering, probably in quite a panicked fashion.

Ah, poor* diesel drivers. You may well just be about to find out how much European supply of diesel got switched from Russia to the Middle East (& India) a few years ago. Product markets are potentially going to go tighter than a drum if disruption continues. *tiny violin plays the hits

The current gas crisis (might be a mini crisis) has shown GB's corollary to the Russia/Ukraine gas crisis, given this one is LNG based while Russia was pipeline. During Russia/Ukraine, NBP frequently traded at a discount to TTF because the GB system is a seaborne hub. Now during this one...

Don't worry guys, it's all sorted. Gas prices have been cooling since midday, losing about 30p/th from the peak. (note: in the not too distant past, that would have meant going to zero)

Remember the retail supplier failures in 22? Well that was caused by day ahead prices jumping above the price cap (in effect quarter head prices) with any unhedged suppliers forced to sell at a loss. Guess what's happening now? Obviously ahead of current price cap (~80p/th) but...

We've gone again today, 40% up vs yesterday. A doubling in price in less than 2 trading days. That is total carnage. A load of long positions were building before this to take advantage of European filling season. Champagne corks are popping somewhere.

Iranian Revolutionary Guards are reported to have closed the Strait via threats of firing on ships. Which idiot said no one is going to physically close the strait? Strap in for more commodity market fun, the escalations just keep on coming right now.

Oil price (Brent) is actually pretty muted today, up about 7% vs Friday's close. I don't really find it surprising, oversupplied before so short term risks are limited. But, product markets might be a good place to watch. GCC mega refineries have largely closed a load of EU capacity...

What just happened? Prices going exponential as per Russia/Ukraine circa 2021. Now up 45% today, the jump from ~28% higher from Friday, up to 45% higher happened in about 15 minutes. Crazy stuff.

Spot on summary here. Pretty much applicable to every article you see on electricity prices these days which can't do more than point at one, maybe two things, and shout. Usually focusing on the things that aren't even the bulk of the story.

NBP front month gas price opens up in 'yikes' territory. Very hard to say whether this sticks as stuff like this typically moves hot and then cools a bit but still, that is a move alright.

Just a little refresher for tomorrow. No real need to update from 8 months ago. No one is going to physically close the strait but insurance companies can do pretty good job of it while multiple Gulf states are being attacked.

Come for the cutting edge* energy market insights. Stick around for the highly predictable political forecasts: turns out it was obscenely funny. *Not guaranteed. Or true.

Someone has created an Alistair Heath headline generator:

Quite the news in the UK DNO sector. Biggest since National Grid grabbed WPD as it was then... That was £8bn in 2021 which would be £10bn in 2025 money so slightly bigger in fact.

What in the 'upside world' is this!?

Is releasing a load of sabre tooth tigers around the Manchester suburbs a good electoral strategy?

So having just done two days of BESS chat, there are three things you need to know: 1) Developers/OEMs/Equipment suppliers are bullish as hell 2) Lenders are looking to lend but... 3) Grid connections are awful everywhere and connections reform in GB is an international laughing stock.

So much to love in this story. Not least that Egdon Resources is basically a zombie company having done nothing since 2022 and is so 'busy' the CEO will respond to an email enquiry to the generic inbox in a matter of minutes. What a detail. www.theguardian.com/environment/...

The people at the FT have been looking at the most boring social media output ever in history (mine).

Just because I'm seeing a few articles popping up on business energy costs, and how GB/UK has highest prices in the world or something, which seems to still riff on the nonsense data in the graph below (will it ever die!?) let's check in one some real world data...

I know standing charges is a hot topic but this is weird to focus on a business that *only* pay standing charges (it imports gas, generates electricity on site to get the CO2 and exports power). The whole point of TCR was to make businesses like this pay more! www.theguardian.com/business/202...

I see the value in this *now* i.e. fleet penetration is low, so fixed wall chargers should sit unused for 90% of hours, therefore increased capex per 'charger' looks ok. But that won't hold for long, 5 years, 7 max. If I were investing in car park EV charging, I'd just take the low tech option.

Also, when tariffs were announced there was a surge in imports to beat deadlines. So, unless tariffs expire this instance (do they?), the converse should happen. Unnecessary imports may freeze until all tariffs are gone*. *I don't know if this can be appealed? But I still see whipsaw effects here.

Looks as though US LNG exports have hit their technical ceiling bouncing around the ~18 Bcf per day level....but what's this? On the right hand side you might just be able to see a certain Golden Pass waking up. That will shift the ceiling higher...again.

Don't know if the 'corporate lot' follow me on here, but you never know, could be I don't have to do this through the hellscape of LinkedIn. Maybe you're in the energy storage sector, maybe you're attending the Storage Summit in London next week. Well as it happens, so am I. Say hi if you are...

Very much enjoying the slow bleed in crypto since the meltdown at the beginning of February. The whole vibes thing to suck in the next level of 'investor' down on the pyramid is that crypto rallies hard after a meltdown. Hopefully we're seeing the next part of the myth breakdown.

Let's just check in on this so far as we are almost...almost starting to contemplate emerging from winter:

Happy Centrica results day. Some years ago I would have been appearing on BBC Radio, usually alongside Martin Lewis to explain (note: not defend) why it made a profit (work of the devil etc). So let's have a little look at a couple of interesting things going on in the results...

I estimate we are one summer away before 'pink hydrogen' becomes a thing again. I estimate we are one summer & one day away from everyone laughing at the notion of 'pink hydrogen'...again.

And here we are, front month prices -6% this morning to put it back basically where it was before the US/Europe/China cold snaps all came along at once.