Thread by @faisalislam

NEW
Rouble finding another cliff to fall off this morning after last week - new record low against the dollar this morning - now 129 to $1, or seven tenths of a US dollar cent…

Range of reasons - but the mulling of a ban on purchase of crude oil from Russia in some form has hit rouble and sent Brent crude oil up 10% to 14 year highs of $129 per barrel, having reached $137 on opening…

The talk came from US Sec of State Blinken yday “We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course at the same time maintaining a steady global supply of oil”…

Those last few words from Blinken about maintaining steady supply without Russia, includes some US officials travelling to Caracas. Venezuela had lost 99% of its oil revenue after domestic chaos and sanctions, but recently doubled production… but is considered Moscow ally…

Venezuela routinely supplied 2.5m-3m barrels of oil per day, even under Chavez, now under 1m bpd…

Russia is the 3rd largest oil producer but second largest exporter. Sanctioning its production would require finding 5, 6m bpd production from somewhere…

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Wholesale gas prices in UK reached utterly incredible new record of 800 pence per therm this morning before settling at 650p a few moments ago. Expectations of sanctions/ supply disruptions from Russia - traders bidding up prices for other LNG tankers…

This is the 20 year chart I showed on News on Friday - shocking enough at 508p, now 650p… for reference, an average of 320p would lead to £3,000 a year, £250 a month for average duel fuel user in October under the cap on unit price

Over weekend I tried to work out the costs to the country of Govt subsidising such utterly unaffordable energy bills for a year or two at these absurd levels if there was an embargo - 50ish billion, about the same as the entire Defence Budget, but a fraction of eg pandemic spend

While Russia is nowhere near as a big a supplier to UK as to rest of Europe, we still pay the international market price… and chart below - 4ish percent of supply, a week and a half’s winter usage, does come from Russian LNG ships, 33 cargos last year. 1 turned away last week…

That data is from @ICIS_energy .. can see how most shipped gas into UK was from Qatar, now from the US. Qataris signed long term deals with the Japanese. US has approached both Qataris and Japanese to try to divert some supply to Europe…

But then where does Japan go? Coal?

NEW Fuel price now averaging £1.55 a litre for petrol say AA and RAC … One fuel boss told BBC prices are heading above £1.70.

Diesel prices have gone up more, as that is more driven by Russian imports already at £1.61 a litre

Still a bit of a way off thankfully… but if Russian oil was actually to be embargoed, can see how a cost of an average 55 litre tank gets to £90 or even £100… requires £1.81 a litre, which has been reached in one service station in Cornwall…

https://twitter.com/sufaca/status/1500553438765199374?s=21

Helpful context here…Ofgem’s price cap (equivalent of £1200 for typical house duel fuel) last winter set in August was predicated on an average per therm price of gas Jan-July 2021 of about 64 pence…

averaged about £2 for first 7 weeks of 2022, and then £3-£8 in past fortnight

NEW About an hour ago the Rouble fell to 147 to the US dollar, another record low, meaning that the rouble has halved in value over the past month…

Or that 1 rouble was worth 1.3 cents a month ago, today fell to 0.66 of a US dollar cent…

Reflective of an interesting gap opening up between petrol and diesel prices, reflecting fact that diesel is more reliant in Russian imports…

https://twitter.com/yorkshire_kk/status/1500910755960573953