Forex EUR/USD Daily Video, March 24, 2022

[Sive Morten]

Good morning,

EUR now stands at the edge of big risks, including commodities prices, needed to be paid in Rubles, escalation in western Ukraine. This makes us to have bearish view and suggest that drop under 1.08 area is a question of time:

 

[sveckar22]

I think a lot of people underestimate the consequences Putin's decision will have on the EU and Euro. Things are different this time around. When I talk to my friends or classmates from Uni who now work in the fin industry I get the idea they do not fully understand what is going on, like the downplayed inflation expectations in 2020. I am not saying that I figured things out by myself but I keep an open mind.

 

[Sive Morten]

I think a lot of people underestimate the consequences Putin's decision will have on the EU and Euro. Things are different this time around. When I talk to my friends or classmates from Uni who now work in the fin industry I get the idea they do not fully understand what is going on, like the downplayed inflation expectations in 2020. I am not saying that I figured things out by myself but I keep an open mind.

Yes, a few who can reasonably assess the possible consequences, whatever country you're living. OMV, Slovenia, Germany, Latvia, Austria and Italy intend to deny rubble payments. I do not know the contracts specific, how payment relies to supply. But, suggest that gas supply will be narrowed, which makes situation in EU economy difficult. Yesterday Biden visited Brussels, maybe they have decided something.... LPG or whatever.

 

[sveckar22]

OMV is in the hands of Austria, but Petrol d.d. is Slovenian gas and oil's biggest commercial distributor, but I didn't hear anything regarding this topic from them. I know the Slovenian president and minister of infrastructure are currently in Qatar and the minister said we could take care of our dependency on Russia's gas with Qatar's gas as soon as next year, but we don't even have a port with a gas terminal not to mention all the logistics, shipping dependency, etc. I know Slovenia is a globally unimportant country and nobody cares even Slovenians right now, but just goes to show that these people are either completely incompetent or conspiring against their own nation, or perhaps both.

 

[Sive Morten]

OMV is in the hands of Austria, but Petrol d.d. is Slovenian gas and oil's biggest commercial distributor, but I didn't hear anything regarding this topic from them. I know the Slovenian president and minister of infrastructure are currently in Qatar and the minister said we could take care of our dependency on Russia's gas with Qatar's gas as soon as next year, but we don't even have a port with a gas terminal not to mention all the logistics, shipping dependency, etc. I know Slovenia is a globally unimportant country and nobody cares even Slovenians right now, but just goes to show that these people are either completely incompetent or conspiring against their own nation, or perhaps both.

Yes, situation promises nothing good actually. I"m not an expert in energetic. Today I've read that the US could replace 2/3 of pipe Russian gas with LPG. Our experts also said the same that 80% of Russian gas could be replaced with alternative energy and LPG delivery. But the cost is the problem. It will be at least 2 times more expensive. The households' wealth will be hurt, decreasing consumption ability, and this could trigger chain reaction. Anyway, both scenarios now look frustrating for EUR.

 

[sveckar22]

Neither am I, but I was looking into it a bit today. My first thought was logistics; if they will be transporting gas from the US they will need tankers if they will be transporting it from the middle east they could use pipelines, some pipelines exist going from Iran and Azerbaijan through Turkey to Bulgaria, but that's not the complete route, I don't know who owns them, the capacity and how keen the owners would be to providing gas to Europe, also the spare capacity of Qatar, etc. is a question.

So they will probably need tankers and a lot of them. They can print the money, but they cant print steel (we know what is the situation with commodity markets right now, so where will they get all this steel and other metals), factories, tankers, etc. so it will take some time either for the tankers to be built and the shipping rates could rise in the meantime providing extra cashflow for those companies as well as new orders will come in for existing companies producing tankers ships.

Apparently, this part of the Gas supply is called Midstream Oil&Gas Industry.

So I went and looked up this industry on finviz.com:

Stock Screener - Overview oilgasmidstream

Stock screener for investors and traders, financial visualizations.

finviz.com

Looks like a lot of these companies are picking up some upside momentum glancing through the charts, I didn't look through their financials and don't know all the factors but it definitely worth looking more into it, especially if these things about American gas will play out in like they are suggesting right now.
This is just my opinion

The next step is getting the gas from the tankers on the shore (Gas terminals and storage), I guess people would not be happy with big terminals obstructing their view of the sunset and all the infrastructure needed can't be built over night.

 

[Sive Morten]

Neither am I, but I was looking into it a bit today. My first thought was logistics; if they will be transporting gas from the US they will need tankers if they will be transporting it from the middle east they could use pipelines, some pipelines exist going from Iran and Azerbaijan through Turkey to Bulgaria, but that's not the complete route, I don't know who owns them, the capacity and how keen the owners would be to providing gas to Europe, also the spare capacity of Qatar, etc. is a question.

So they will probably need tankers and a lot of them. They can print the money, but they cant print steel (we know what is the situation with commodity markets right now, so where will they get all this steel and other metals), factories, tankers, etc. so it will take some time either for the tankers to be built and the shipping rates could rise in the meantime providing extra cashflow for those companies as well as new orders will come in for existing companies producing tankers ships.

Looks like a lot of these companies are picking up some upside momentum glancing through the charts, I didn't look through their financials and don't know all the factors but it definitely worth looking more into it, especially if these things about American gas will play out in like they are suggesting right now.
This is just my opinion

The next step is getting the gas from the tankers on the shore (Gas terminals and storage), I guess people would not be happy with big terminals obstructing their view of the sunset and all the infrastructure needed can't be built over night.

Well, if we would consider most optimistic scenario with 100% replacement with LPG and even some minor amount of Azer gas through Turkish pipe to Bulgaria - it will be 2 times more expensive, just because of LPG and US greed.
In reality now insufficient LPG tankers fleet to satisfy the demand, Iran is under sanctions, Qatar could deliver only LPG (no pipe is possible as the US scenario to split Syria into parts failed), Azer gas is available, but pipe capacity is too small. To be honest, I do not know what EU gonna do, and what they count on. Please correct me, if I wrong but it is a vision from the side, that politicians and Brussels bureaucrats are living in some parallel reality, maybe even virtual one, treating everything like in some PC game. Like citizens and everything around them doesn't exist. Also I'm scarily watch to the autumn, and wheat supply, as well as other agricultures, sunflower etc...

 

[sveckar22]

Well, if we would consider most optimistic scenario with 100% replacement with LPG and even some minor amount of Azer gas through Turkish pipe to Bulgaria - it will be 2 times more expensive, just because of LPG and US greed.
In reality now insufficient LPG tankers fleet to satisfy the demand, Iran is under sanctions, Qatar could deliver only LPG (no pipe is possible as the US scenario to split Syria into parts failed), Azer gas is available, but pipe capacity is too small. To be honest, I do not know what EU gonna do, and what they count on. Please correct me, if I wrong but it is a vision from the side, that politicians and Brussels bureaucrats are living in some parallel reality, maybe even virtual one, treating everything like in some PC game. Like citizens and everything around them doesn't exist. Also I'm scarily watch to the autumn, and wheat supply, as well as other agricultures, sunflower etc...

They are just gonna blame it all on somebody else, start pointing fingers, and all the other stuff like they always do, or maybe if someone "new" gets "elected", he will just say the ones before me made this mess.

I agree with you, maybe they are working for somebody else not the citizens of the European Union. To me, it looks like, the US pushed the EU (with the help of our leaders) into all this mess and the things have been cooking for a long time. But they will just blame it on somebody else, inflation because of supply shortages and covid, high energy prices, and food shortages on Russia and war. Will people buy it in the future, how bad the things need to get before people get really sick of it? I don't know.
The propaganda machine is working hard here.

We like to talk about this stuff and speculate about what could happen, but in reality, the standard of living of a lot of people will fall significantly and the middle class will get smaller. Inflation, energy crisis, food shortages are really scary and sad things, especially knowing that it didn't have to be this way. What will happen with all the people in Egypt and other countries dependent on Russian and Ukrainian wheat, new immigration crisis?