Russia-Europe Energy Thread

[ASFC]

China has $2T in hard cash. They are going to built over 100 reactors and compelete with transfer of technology from Areva/Westinghouse/rosatom etc
This will increase Russia leverage with EU countries in Nuclear fuel cycle. as those China suck up fuel from other sources. the same happened to Semiconductors as EU fabs close down and equipment shipped to Russia. U r not fully comprehending the effect of globalization where every one is taking from same pot. Easter EU is importan as new industries shift from West to East for proximity. they will need for supply of energy not to mention rising incomes use more energy by definition. Globlization is not in West interest and Russia fully knows it to exploit it. EU weak economic and diplomatic postion is obvious from Kosvo issue as only 43 countries recognize it. . just look at how many countries in world out of 200 came out practically against Russia on Georgia. It is that bankrupt economic system that is based on public bluster but nothing for practice.

nfloorl: Why bring this up-Strawman. You cannot say Kosovo shows the EU to be weak diplomatically and economically when it has no official position on Kosovo, and therefore cannot say that only 43 countries supporting the EU shows it to be a weak organisation when it has nothing to do with the diplomatic side on Kosovo (through its own choosing).
Let me see, 45 countries have recognised Kosovo, 47 have said they won't, the rest are indifferent. Alot of those who have not are driven by their own territorial disputes and the wish not to create a precedant that could break up their own countries.
In fact this could show the EU to be rather strong. Rather than sit on their backsides like Russia and Serbia and make lots of noise and international brinkmenship, the EU is leaving recognition up to national Govts (with all the brinkmanship that goes with that desicion) and are concentrating on helping those on the Ground with its missions there for the police and Judiciary.

Do explain how the 'West' is running a bankrupt economic system-in the real world.

I have already pointed out that the major Nuclear Fuel Powers do not rely on Russian sources for uranium. So Russia has absolutely no leverage in that market against the west, in fact lack of Russian involvement is one of the reasons the UK Govt is quite pro-nuclear where it once might not have been.
If you cannot see beyond your nationalistic pride that Russia cannot and does not control every source of energy then that is your problem and not mine at the end of the day.

And I would really like you to show credible sources that China will be build over 100 Nuclear Power Stations, and the timsescales invloved. Whilst they might build coal and gas fired power stations quite quickly, I expect some long lead in time before they get these 100 Nuclear Reactors.

 

[Grand Danois]

Oil is different. 1% production fluction per year does not matter when u have 50% price increase.

Except that it wasn't the 1% drop that increased the price - it was increased demand and thus a net loss.

Russia had inflation of over 12% since 90s. Does it mean that defence budget of 90s is bigger than 2008. this the flawed logic of JDW. since they simply cant understand Russian economic sytem. West had low inflationary period in 90s all of sudden they wake up to higher prices and than start believing that Russia had the same problem just now which infact is old thing.

So internal inflationary pressures doesn't affect Russia? That's a very unique economic system. Absolutely no convergence as the economy develops!!!

Special rules for Russia.

Again the same mistake with natural resources. the rest natural resources u produce the more market price u get. It is the same like Wheat/Corn etc. It is better to get cheaper supply chain to defence firms rather than exposing them to open market manipulation.

Uhm no. See my first paragraph. Sorry. It just isn't so.

 

[roberto]

nfloorl: Why bring this up-Strawman. You cannot say Kosovo shows the EU to be weak diplomatically and economically when it has no official position on Kosovo, and therefore cannot say that only 43 countries supporting the EU shows it to be a weak organisation when it has nothing to do with the diplomatic side on Kosovo (through its own choosing).
Let me see, 45 countries have recognised Kosovo, 47 have said they won't, the rest are indifferent. Alot of those who have not are driven by their own territorial disputes and the wish not to create a precedant that could break up their own countries.
In fact this could show the EU to be rather strong. Rather than sit on their backsides like Russia and Serbia and make lots of noise and international brinkmenship, the EU is leaving recognition up to national Govts (with all the brinkmanship that goes with that desicion) and are concentrating on helping those on the Ground with its missions there for the police and Judiciary.

Russia hasnt takens strong position on Kosov. they are quite capable of invading 5 to 10 countries in its borders and completely discredit article 5 of NATO. That time hasnt come yet.

Do explain how the 'West' is running a bankrupt economic system-in the real world.

So how u explain that China rise this year as largest manufacturing nation. its is exactly due to Western corporate leakage as they dont have any faith in its debt ridden consumer thats why they need emerging markets for profits.
it creates more opportunity for Russia to squeeze other countries.

I have already pointed out that the major Nuclear Fuel Powers do not rely on Russian sources for uranium. So Russia has absolutely no leverage in that market against the west, in fact lack of Russian involvement is one of the reasons the UK Govt is quite pro-nuclear where it once might not have been.
If you cannot see beyond your nationalistic pride that Russia cannot and does not control every source of energy then that is your problem and not mine at the end of the day.

And I would really like you to show credible sources that China will be build over 100 Nuclear Power Stations, and the timsescales invloved. Whilst they might build coal and gas fired power stations quite quickly, I expect some long lead in time before they get these 100 Nuclear Reactors.

http://torontosun.com/News/Canada/2008/08/17/6478251-sun.html
There are 100 reactors being planned worldwide for the next 20 years, but experts expect the number of plant operations to double by 2030 so that would be another 400 plants," Dr. Neil Alexander, the newly appointed president of the Organization of CANDU industries, told the Sunday Sun.

"The way I see it, it's like you are a surfer and you see a wave of opportunity rising and you're paddling fast to get to the top to ride that wave."

A monster wave has already passed.

China has moved to increase its nuclear power capacity five-fold by 2020 -- that's two new reactors a year

 

[Grand Danois]

Russia hasnt takens strong position on Kosov. they are quite capable of invading 5 to 10 countries in its borders and completely discredit article 5 of NATO. That time hasnt come yet.

Dunn dunn dunn!!!

nfloorl:

 

[ASFC]

Russia hasnt takens strong position on Kosov. they are quite capable of invading 5 to 10 countries in its borders and completely discredit article 5 of NATO. That time hasnt come yet.

So the idea that Russia considers Kosovo 'illegal' and is strongly supporting Serbia is not a strong position? And tell me what makes you think Russia is stupid enough to risk NATOs reaction to an invasion of a NATO country-which you know where it will lead. For a Russian President to attack NATO is as Stupid as Georgia starting this current war- so stop spouting rubbish. Just because Europe did nothing when Russia invaded Georgia, doesn't mean NATO would stand idly by whilst Russia tried to walk over Europe.

 

[roberto]

Except that it wasn't the 1% drop that increased the price - it was increased demand and thus a net loss.

Increase demand of Oil in 2008? can u show me a single report that shows there is increase demand in the world in 2008 compared to 2007? Price increase has nothing to do with increase demand. Think harder.

So the idea that Russia considers Kosovo 'illegal' and is strongly supporting Serbia is not a strong position? And tell me what makes you think Russia is stupid enough to risk NATOs reaction to an invasion of a NATO country-which you know where it will lead. For a Russian President to attack NATO is as Stupid as Georgia starting this current war- so stop spouting rubbish. Just because Europe did nothing when Russia invaded Georgia, doesn't mean NATO would stand idly by whilst Russia tried to walk over Europe

its hardly a strong position. Strong position means to do some thing practically about it. And there is new Military doctorine for Russia. Next 4 years would be quite interesting. NATO is in no position that is going to stop it now.

http://www.kommersant.com/p917043/r...lined_a_new_foreign_policy_concept_of_Russia/
Ambassador Rogozin’s address had much in common with the speech of Russia’s President Dmitry Medvedev, which he gave before Russia’s diplomats on July 16. Ahead of the session Dmitry Rogozin told Kommersant what he had prepared for the listeners in Brussels, “I’ll emphasize that the new Russia has taken a new role. From this time on we’ll be guided by the principles that are beneficial to us.”

 

[Grand Danois]

Increase demand of Oil in 2008? can u show me a single report that shows there is increase demand in the world in 2008 compared to 2007? Price increase has nothing to do with increase demand. Think harder.

I was absolutely sure you contended that the 1% drop was in order to increase cost. Wait, that was absolutely what you said!!! Are you reversing postion?

The price hike over the past years have had nothing to do with Russian manipulation. Precise enough?

Don't play semantics.

 

[roberto]

I was absolutely sure you contended that the 1% drop was in order to increase cost. Wait, that was absolutely what you said!!! Are you reversing postion?

The price hike over the past years have had nothing to do with Russian manipulation. Precise enough?

Don't play semantics.

U clearly said that Oil price increase is due to increase in demand. But there is no increase in demand in 2008 relative to 2007. So what explain 50% price increase. World is in serious economic decline. the only way to explain Price increase is Putin strategy. On one hand it enriches him without increasing production and on the other hand it weakens the industrialized consumer countries so they can sell there advance products to Russia to ward off economic collapse.

http://uk.reuters.com/article/oilRpt/idUKL1424554320080714
Saudi and Russia agree on oil issues: Saudi Prince

 

[Grand Danois]

U clearly said that Oil price increase is due to increase in demand. But there is no increase in demand in 2008 relative to 2007. So what explain 50% price increase. World is in serious economic decline. the only way to explain Price increase is Putin strategy. On one hand it enriches him without increasing production and on the other hand it weakens the industrialized consumer countries so they can sell there advance products to Russia to ward off economic collapse.

But Russia increased production while price was on the rise! The increase was due to increase in demand. Now Russian output is less and cost is falling.

The reverse of the model you're proposing!

Russia doesn't follow your concept.

 

[roberto]

But Russia increased production while price was on the rise! The increase was due to increase in demand. Now Russian output is less and cost is falling.

The reverse of the model you're proposing!

Russia doesn't follow your concept.

They increase production untill 2007 when prices averaged $67 dollar a barrel. In 2008 they didnot increase anything as price avg is $115 untill now. So no point to invest massive amount just to get 1 or 2% increase.
U can clearly see 7 month continous increase in export tax. it just means they dont want to export that much.

http://www.turkishdailynews.com.tr/article.php?enewsid=103588
Russia to raise oil export tax

Russia will increase its crude export tax by 17 percent to a record on June 1. The tax will be set at $398.10 per metric ton, the seventh consecutive increase, Alexander Sakovich, deputy head of the Finance Ministry's customs department, said by telephone in Moscow Sunday. The current duty is $340.10 a ton, or $46.40 a barrel.

 

[Todjaeger]

Increase demand of Oil in 2008? can u show me a single report that shows there is increase demand in the world in 2008 compared to 2007? Price increase has nothing to do with increase demand. Think harder.

Since you asked for it.... Look here. It clearly indicates an increased demand for oil in 2008 over 2007, with that in turn being greater than 2006 and so on.

That would seem to contradict the following statement.

U clearly said that Oil price increase is due to increase in demand. But there is no increase in demand in 2008 relative to 2007. So what explain 50% price increase. World is in serious economic decline. the only way to explain Price increase is Putin strategy. On one hand it enriches him without increasing production and on the other hand it weakens the industrialized consumer countries so they can sell there advance products to Russia to ward off economic collapse.

As for explaining the price increase for petroleum products, the "Putin strategy" is by no means the only explanation. At the most basic level, the price of a product (petroleum) increases as the demand increases relative to the supply. Given the high levels of industrialization and development in the West, there is an ongoing high demand for fuel sources. With the increasing industrialization and development occurring in China and India, these two markets are having an increased demand for fuel, particularly relative to their domestic petroleum supplies. The demand has grown at a pace that the world production of petroleum has not been able to keep pace with, and the trend is expected to continue (see here and here). As a natural outgrowth of the increased demand vs. supply, there was a price increase per barrel of petroleum. The demand was exacerbated this year (and in prior years too) by the actions of energy speculators who further increased the price by reducing the available petroleum supply by making speculation purchases of petroleum. Essentially some of the current supply was being stockpiled in anticipation of even higher future prices due to increased demand, reduced supply, or various disruptions in the flow of petroleum to the end-users.

AFAIK elements of Congress and the US government are looking into whether the actions of the energy speculators were sufficient to cause a significant disruption or impact on the petroleum markets.

-Cheers

 

[roberto]

Since you asked for it.... Look here. It clearly indicates an increased demand for oil in 2008 over 2007, with that in turn being greater than 2006 and so on.

That would seem to contradict the following statement.

ur link is only future speculation. not actual demand. That is actual conditions. I bet EU/Japan are in same situation. the only demand is inside Russia/OPEC etc.

http://www.bangkokpost.com/180808_Business/18Aug2008_biz46.php
Concerns over a slowdown in global demand remained the main factor weighing down prices. US oil demand in the first half of this year dropped by an average of 800,000 barrels per day, the biggest fall in 26 years.
China reported a sharp drop in crude imports in July by 7% to a seven-month low, which some analysts cautioned could be an early sign of a slowdown in Chinese demand

As for explaining the price increase for petroleum products, the "Putin strategy" is by no means the only explanation. At the most basic level, the price of a product (petroleum) increases as the demand increases relative to the supply. Given the high levels of industrialization and development in the West, there is an ongoing high demand for fuel sources. With the increasing industrialization and development occurring in China and India, these two markets are having an increased demand for fuel, particularly relative to their domestic petroleum supplies. The demand has grown at a pace that the world production of petroleum has not been able to keep pace with, and the trend is expected to continue (see here and here). As a natural outgrowth of the increased demand vs. supply, there was a price increase per barrel of petroleum. The demand was exacerbated this year (and in prior years too) by the actions of energy speculators who further increased the price by reducing the available petroleum supply by making speculation purchases of petroleum. Essentially some of the current supply was being stockpiled in anticipation of even higher future prices due to increased demand, reduced supply, or various disruptions in the flow of petroleum to the end-users.

AFAIK elements of Congress and the US government are looking into whether the actions of the energy speculators were sufficient to cause a significant disruption or impact on the petroleum markets.

-Cheers

Any demand increase in China/India etc is compensated by weak economic conditions in West. So there is no net increase to justify 50% price rise.

 

[Grand Danois]

They increase production untill 2007 when prices averaged $67 dollar a barrel. In 2008 they didnot increase anything as price avg is $115 untill now. So no point to invest massive amount just to get 1 or 2% increase.
U can clearly see 7 month continous increase in export tax. it just means they dont want to export that much.

Ahh. So you admit it was a conscious move, not to manipulate markets, but to increase revenue.

Thank you.

 

[Todjaeger]

ur link is only future speculation. not actual demand. That is actual conditions. I bet EU/Japan are in same situation. the only demand is inside Russia/OPEC etc.

I suggest re-reading the chart in the link. It is dated July 10th of this year and includes data for the first half of 2008 and compares that with the same period in 2007. Also the other links provided additional historical data from the US DOE indicating the increased use of petroleum over time.

Any demand increase in China/India etc is compensated by weak economic conditions in West. So there is no net increase to justify 50% price rise.

As the charts indicate, there has been a drop in demand on the part of the West, because the current fuel usage behavior was not able to continue in such a high cost environment. The price rise preceded the drop in usage, and thus demand. Not the other way around. Also as a result of changes to political/security conditions in parts of the world, threats to future supplies were deemed lower, thus reducing some of the speculative pricing which had played a role in the price rise. However, there has still been a net overall increase in the demand for petroleum worldwide, even with a change in consumption habits in the US.

In point of fact, while there was a reduction in US consumption, within other member-nations of the OECD, there was an increase as seen here resulting in a net ~500,000 barrel/day increase in consumption for the first half of 2008 compared to prior years.

While there are a number of factors which come together to determine petroleum costs, the indications are that total demand has been growing at a faster rate than total production. If there is something which is available indicating the opposite as some have claimed, that worldwide production is increasing at a faster rate than the growth in demand, and/or that global demand is decreasing relative to global production, please post it. Otherwise, it would appear that claims are being made with incomplete, or selective data to support ones position.

-Cheers

 

[roberto]

I suggest re-reading the chart in the link. It is dated July 10th of this year and includes data for the first half of 2008 and compares that with the same period in 2007. Also the other links provided additional historical data from the US DOE indicating the increased use of petroleum over time.

I have clearly read the chart. it is giving projection not actual data.

As the charts indicate, there has been a drop in demand on the part of the West, because the current fuel usage behavior was not able to continue in such a high cost environment. The price rise preceded the drop in usage, and thus demand. Not the other way around. Also as a result of changes to political/security conditions in parts of the world, threats to future supplies were deemed lower, thus reducing some of the speculative pricing which had played a role in the price rise. However, there has still been a net overall increase in the demand for petroleum worldwide, even with a change in consumption habits in the US.

In point of fact, while there was a reduction in US consumption, within other member-nations of the OECD, there was an increase as seen here resulting in a net ~500,000 barrel/day increase in consumption for the first half of 2008 compared to prior years.

While there are a number of factors which come together to determine petroleum costs, the indications are that total demand has been growing at a faster rate than total production. If there is something which is available indicating the opposite as some have claimed, that worldwide production is increasing at a faster rate than the growth in demand, and/or that global demand is decreasing relative to global production, please post it. Otherwise, it would appear that claims are being made with incomplete, or selective data to support ones position.

-Cheers

500,000 bbl/d even if it is true (Preliminary based on speculation for other countries) is less than 1% increase in demand. it does not justify more than 50% increase in prices. infact 1% demand increase is is below normal figure through out the history of Oil consumption. the only new factor is Putin.

http://www.eia.doe.gov/steo
Consumption. Preliminary data indicates that global consumption rose by roughly 500,000 barrels per day (bbl/d) during the first half of 2008 compared with year-earlier levels, as a 1.3-million bbl/d rise in consumption outside of the Organization for Economic Cooperation and Development (OECD) was partially countered by an 800,000 bbl/d drop in U.S. consumption compared with year-earlier levels.

 

[roberto]

Ahh. So you admit it was a conscious move, not to manipulate markets, but to increase revenue.

Thank you.

It means that the knew ahead of time that price will increase so they increase export duty ahead of time to collect money with out caring about production or investment levels.

 

[Grand Danois]

It means that the knew ahead of time that price will increase so they increase export duty ahead of time to collect money with out caring about production or investment levels.

This would be the third model you offer?

 

[roberto]

This would be the third model you offer?

It is part of same explaination. They wouldnt have continously increase export tax to such levels without prior knowledge. when u have such high prices. u practically dont care about production levels. They are continously increasing it.

http://steelguru.com/news/index/2008/07/24/NTU5NDI=/Russia_to_raise_oil_export_duty_from_August.html
Russia to raise oil export duty from August
RIA Novosti reported that Russia's government has approved a rise in Russian oil export duty of USD 97.8 to a record USD 495.9 per tonne as of August 1st.

Export duties on light oil products will rise to USD 346.4 per tonne from August 1st 2008, from the current USD 280.5 and duty on heavy petroleum products will grow to USD 186.6 per tonne from USD 151.1.
The government adjusts export duty on crude and petroleum products every two months, depending on changes in the Urals blend price on world markets

 

[Grand Danois]

It is part of same explaination. They wouldnt have continously increase export tax to such levels without prior knowledge. when u have such high prices. u practically dont care about production levels. They are continously increasing it.

So we can agree the Russian Govt has by discouraging investment capped production (and effectively diminished the reserves) for the purpose of maximising profit.

And since Russian domestic consumption is on the increase, Russian influence through oil is set to diminish in the future.

 

[Feanor]

As is Russian oil production (at least in the near future) as current oil sites run dry and new ones take quite a bit of time and money to get going. Remember pumping a barrel of oil from Eastern Siberia is not the same as pumping a barrel in Kuwait.