Now she's just showing off. I get the impression Ms. Kaminska could write a couple thousand words on natty before breakfast.
And current events sure make Enron and Teesside and "the dash for gas" seem quaint.
And a long time ago.
From the editor of FT Alphaville:
How the natgas crisis emulates the Northern Rock crisis
The old problem of over-relying on short-term wholesale markets is rearing its ugly head again.
Britain’s natural gas shortage, and fears of a possible winter of discontent featuring 70s-style rolling blackouts, have been driving headlines all week. But a fact largely missing from the coverage is just how closely the structural situation resembles the one that drove the collapse of Northern Rock in 2007, and which later catalysed the wider financial crisis of 2008.Before we set out how, though, it’s worth stressing that the natgas shortage is not solely a UK phenomenon. Europe is suffering too. Significantly.
The shortages themselves are the product of a perfect storm of global issues. These include under-stockpiling during the summer period in Europe due to more competition for LNG (liquid national gas) supplies from Asia; uncertainty related to delays in the launch of the Nord Stream 2 pipeline from Russia; and colder-than-expected weather in many parts of continental Europe, including Russia itself.
While it may feel like the natgas price hike is particularly acute in the UK relative to Europe, where prices have at times been significantly lower, this is not outside the norm. Because the UK is a net importer, it often has to attract supplies from Europe via its Interconnector system by paying a premium. Bar a few transitory spikes every now and then the two markets, however, tend to trade very closely together.
Another under-appreciated point is that the natgas market as a whole — not dissimilar to its close cousin the power market — has a historical susceptibility to extreme price moves and volatility. This is a function of there only being so much pipe and long-term storage in the system, and of a market incentive to never pay for expensive storage or excess reserves if it can be avoided. In recent years the rise of the LNG spot market, and the capacity to ship in volumes in an ad hoc manner from beyond the core pipeline system, has tempered some of that volatility. UK prices were remarkably stable throughout 2015-2019 as a result.....
....MUCH MORE
My only problem with the analogy is I will never be able to come up with headlines like "Northern Rocked, City Shocked" and "Rock Paper, Scissored" ever again.
