[HN Gopher] An unconfirmed tweet about Freeport LNG is upending ...
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An unconfirmed tweet about Freeport LNG is upending gas markets
Author : JumpCrisscross
Score : 41 points
Date : 2022-11-11 21:01 UTC (1 hours ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| gnabgib wrote:
| https://archive.ph/S7D40
| bergenty wrote:
| All you need is one of these in your life and you can sail away
| into the sunset.
| CyanLite2 wrote:
| Figured this was inevitable--someone ponied up the $8 to get
| "verified" on Twitter and posted economic news to move the
| markets in the direction they want.
| [deleted]
| matai_kolila wrote:
| Why is anyone still believing this stuff? How is anything on
| Twitter taken seriously anymore??
| newZWhoDis wrote:
| Funny that you say this, taking OP at face value that the
| account was verified (it was not).
|
| You're doing the same thing
| netsharc wrote:
| I guess it's traders gambling, "We're not sure if it's true,
| but if it's true, then we need to be ahead of the rest of the
| market!".
|
| Interestingly, if I were a trader and I knew the Eli Lily
| tweet was fake, would I ask "What are the chances a many
| people are going to fall for this, and how will they react,
| and can I make a profit out of their stupidity?"
| blibble wrote:
| > How is anything on Twitter taken seriously anymore??
|
| it was ever taken seriously?
| oneeyedpigeon wrote:
| Not sure what country you're in, but here in the UK, a non-
| zero amount of our news coverage is built on the twitter
| house of cards. And if you're in the US, it seems a
| significant part of your politics is affected by twitter
| too.
| parker_mountain wrote:
| > How is anything on Twitter taken seriously anymore
|
| Although the average user on HN is terminally online, most
| people still view Twitter as a useful utility.
|
| Every day Elon continues this charade is a day of incredible,
| massive brand damage.
|
| Someone posting Eli Lily was pricing insulin for free caused
| their stock to plunge - along with other biotech companies.
| Someone convinced many people that an official Nintendo
| account said Mario was gay. No wonder advertisers are pulling
| their ads.
| ianai wrote:
| But we'd all be better off if people knew to take the
| internet with appropriate doses of skepticism.
| alphabetting wrote:
| the account in question wasn't verified fwiw and only has 485
| followers. they've deleted all their tweets talking about
| freeport. definitely agreed on their motives though.
| pjc50 wrote:
| A more fun one:
| https://www.proactiveinvestors.co.uk/companies/news/998165/e...
| fragmede wrote:
| not to ruin a funny moment, but
|
| > Eli Lilly is down 5% because the market for their most
| profitable drug, a $125k/yr mAb IL-17 inhibitor, fell 5%.
| This is why Novartis, their major competitor with Cosentyx,
| is also down the same amount
|
| https://twitter.com/quantian1/status/1591149510168039426
|
| which sounds a lot more believable, imo
| factsarelolz wrote:
| This is a "hot take", unsubstantiated, and incorrect.
|
| Do better.
| recuter wrote:
| One might say the same to Bloomberg.
| mzs wrote:
| screenshots:
| https://twitter.com/badc0fee/status/1591200197836967936
| JumpCrisscross wrote:
| And there goes SS 230...
| froh wrote:
| whut?
| ohwellhere wrote:
| It's a useless comment, but this is what they were
| referencing: https://en.wikipedia.org/wiki/Section_230
|
| I think the implication is that if there are significant
| financial repercussions for social media posting then some
| portion of the government would revoke Section 230 protection
| from the providers; e.g. Musk's Twitter would become the
| publisher officially.
| toomuchtodo wrote:
| If Twitter's policies do enough economic damage, one would
| expect Congress to hold committee meetings and consider
| modifying or removing Section 230 protections. It's not
| terribly far fetched.
| bombcar wrote:
| Which would be sad, what we're seeing is too many quants
| dependent on twitter for "fast breaking news".
| dilyevsky wrote:
| Twitter is doing for social media what tesla been trying to do
| to self-driving industry
| veqq wrote:
| Commodity traders and investors are very networked and really
| like such immediate usage news. Many firms also count
| trucks/traffic near sites etc. so it isn't surprising to see
| people respond to this.
|
| However, the causation is unclear to me. European gas stocks are
| at full capacity as is and this Winter is warm with minimal gas
| burned so far. A 7% drop is par for course in the last few weeks.
| An extra piece of bad news wouldn't necessarily lead to this -
| though it could perhaps amplify it to some extent.
|
| You'd have to compare message posting time, look at the
| views/readership of that tweet etc. That said, this is relatively
| straight forward and included in many sentiment analysis engines.
| ThalesX wrote:
| > this Winter is warm with minimal gas burned so far
|
| I feel like I'm going crazy as this is not the first time I've
| seen / heard this argument. What does winter mean? I thought it
| was the months from December to February. I don't understand
| the narrative that we're in a warm winter _at all_. Winter,
| just like Game of Thrones, is coming.
| kmonsen wrote:
| From what I have heard the fact that European gas storage is
| full is nice but not really all that meaningful. The gas
| storage is only large enough to last a week or something in
| that magnitude.
| sveme wrote:
| The German storage facilities hold gas for two months of
| typical January consumption rates.
| [deleted]
| cube2222 wrote:
| The EU gas storage is actually around 2 months.
|
| Full capacity is ~1000TWh[0], while winter monthly
| consumption is around 450 TWh[1].
|
| In other words, way more than a week, and yes, the storage
| does make a meaningful difference.
|
| [0]: https://www.statista.com/statistics/1294025/quarterly-
| gas-in...
|
| [1]: https://energy.ec.europa.eu/system/files/2022-04/Quarter
| ly%2...
| mistrial9 wrote:
| cannot be but amazed at the spectacle of wealthy markets fretting
| over pennies due in ninety days
|
| cracked pipe => crack pipe?
|
| sorry to be vulgar, but the fish don't see the water here
| crmd wrote:
| Can someone explain why the rumor of cracked pipes and delayed
| restart of a terminal would cause the futures price to go down?
|
| I would think that news of a supply constraint would cause the
| price to go up.
|
| TIA
| deniz_tekalp wrote:
| US has a large supply of natural gas and domestic prices are
| cheap. LNG prices are very high globally. The price discrepancy
| exists because there is not enough LNG export capacity. This is
| a very large LNG export facility. When it gets back on global
| LNG supply should increase and prices should fall. Domestic
| supply should decrease and prices should increase.
| thwayunion wrote:
| The terminal is for exports from the US (particularly to
| Europe), and the futures contracts are on US gas prices.
|
| Europe desperately needs gas this winter. Markets are pricing
| in the assumption that the US producers will get great prices
| from European consumers this winter.
|
| If US gas can't get to Europe then the US can't sell that gas
| at high prices in Europe. Also, additionally, the domestic
| market will be flooded in supply.
| twawaaay wrote:
| Isn't it true that the price for gas in Europe is very
| inelastic at the moment (meaning they will pay pretty much
| any price to get it) and so any shortage of it will cause
| dramatic price increase? Also, Europe can't easily switch to
| another source of gas because they have maxed out everything
| they could.
|
| This is basically the reason why OPEC restricts oil
| production, it is just here the same is happening
| unintentionally by LNG terminal malfunction.
|
| --
|
| Besides, looking at that graph it looks that the "plunge" is
| on the order of normal price change noise. Just look at the
| history from before the "plunge". Clickbait.
| hn_throwaway_99 wrote:
| Not sure if your post is trying to contradict the post you
| are replying to, which made the very good point that what
| plunged are _US_ gas futures. I assume that yes, this would
| be very bad news for European gas consumers.
| jopsen wrote:
| And electricity consumers, since prices usually trend gas
| prices.
|
| And anyone buys exports manufactured in Europe...
| CamperBob2 wrote:
| _Besides, looking at that graph it looks that the "plunge"
| is on the order of normal price change noise. Just look at
| the history from before the "plunge". Clickbait._
|
| Clickbait is literally the business model at Bloomberg:
| https://www.businessinsider.com/bloomberg-reporters-
| compensa...
| [deleted]
| DelightOne wrote:
| > meaning they will pay pretty much any price to get it
|
| They would buy it at current market rate, which is dropping
| atm. That's why LNG tankers wait at the coast for a
| hopefully future higher price.
| staticautomatic wrote:
| Is this not diminished by the buyers hedging?
| dylan604 wrote:
| >it is just here the same is happening unintentionally by
| LNG terminal malfunction.
|
| with all that is going on in the world, it would be really
| easy to give into the conspiracy aspect and say intentional
| malfunction. we've already seen what has been agreed upon
| as sabotage to underwater pipelines. why not a terminal
| like this as well?
|
| <grabs the popcorn>
| nimbius wrote:
| whats interesting to consider is that while russia had no
| interest in sabotaging their nordstream pipelines, the US
| absolutely did. conversely russia has great interest in
| fouling up the gas markets the US relies upon to profit from
| russias curious energy export misfortunes.
| nuclearnice3 wrote:
| When operational, this facility consumes billions of cubic feet
| of natural gas [1]. They take gas make it liquid, put it on a
| boat, ship it.
|
| If they have cracked pipes, they are less likely to reopen.
|
| Not reopening, not going to consume the gas.
|
| Less demand for gas.
|
| Price drops.
|
| [1] https://www.eia.gov/todayinenergy/detail.php?id=52859
| bbryant wrote:
| The futures price is for US. The terminal is for export. So
| terminal failure pushes more supply into US market.
| woranl wrote:
| Freeport buys US natural gas and turns that into LNG for export
| to Europe. With a plant shutdown, it's not buying as much
| natural gas domestically. Hence price in US goes down. Despite
| still high globally.
| teesnee wrote:
| Note the article's wording: " _US_ natural gas futures
| plunged... " If the US can't export, there is increased
| _domestic_ supply, causing the futures price to fall. If
| exports through the terminal resumed, US prices would rise
| since now global buyers are competing with domestic buyers, and
| prices between linked markets (e.g. US & EU) would equilibrate
| slightly. Also important to recognize that EU gas prices are
| much higher than US prices, so there is large demand for US->EU
| LNG shipments.
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(page generated 2022-11-11 23:00 UTC)