With Russia as a ring leader, energy ministers from 12 of the world’s leading exporters of natural gas met in Moscow on Tuesday to create a producers’ group that consumers fear could develop into an OPEC-style cartel. Vladimir Putin, warned that the era of “cheap gas” was coming to an end, and said members of the group would co-operate to make the gas market “predictable”. Russia, the world’s biggest gas producer and the driving force behind the group, said it would not be a cartel, but would work to enhance energy security at a time when the gas market is becoming increasingly globalised. At the same time they are pushing for higher world gas prices to reflect what they see as its value as a relatively clean source of energy and potential as a transport fuel. Not surprisingly, another strong voice for forming cartel is from Iran. Just like Russia, this country has some strange visions of grandiosity, based solely on relatively large reserves of oil and gas. Should this happen, we can expect Russia to try to meddle even more in world affairs, with vague threats of cutting production or deliveries.
Very unlikely that the current group would be able to cooperate as well as OPEC(even if their co-working is hardly perfect), so I wouldn’t expect any formal agreement just yet. From my point of view it would be good to know how they want to price gas- US Dollars, Euros or a basket of currencies? If anybody has any ideas, please share them.
The world of currency trading has been as exciting as watching paint dry. And no, I’m not talking about body paint. Dollar pairs are largely stuck in relatively narrow ranges. Yen is not getting as weak as yesterdays pessimism would suggest, but I think it will soon. I spent most of my time flipping from chart to chart, not finding much reasons to trade. But I did this.
Yesterday I lost 74 pips in CAD-CHF, and today I gave it another go. Bought at 0.8917, looking for 60-70 pips. Entry was at the end of that hourly bullish candle. I had 2 reasons to enter into this trade. One, I was bored, two, look at number one. Neither one is a reason good enough, but I’ve been sticking to reasons for a long time. This is my idea to go crazy (risking 50 or so pips with 1:1 margin). Real adventurer I am. In case CAD gets weaker again I have this order pending.
More seriously, if this level is breached, following move could be good for as many as 300 pips. Time is an issue, with Christmas nearby, one would have to be prepared to sit on it maybe as long as week. My focus for tomorrow is potential weakness in JPY. All crosses. By this time tomorrow I’ll be done trading and taking a well deserved( I think) break.
Mike K.
If this group was really to organize themselves, I think that countries like Iran would prefer to have the price set in any currency but USD. In their eyes it would be some kind of blow to USA.
You maybe right.
Real risk taker. No margin and about 50 pips in draw down. That’s great. Why risk real money on a “play trade”. And this Organization of Gas Producers? It is going to be a real joke. They will be cheating each other on quotas more than OPEC ever has. And the price stability they talk about? With countries like Russia and Iran using it as an istrument of foreign policy, it will be anything but stable.
That’s me, Maxim, nothing but risks.
[...] happen. I got out at 1.7855 and Pound fell into new depth of misery. Few days ago in a post Another cartel I talked about long EUR-CAD trade. I placed an order and, well, forgot about it. Got sloppy and [...]
[...] gas was mentioned here when Russia and other gas producing countries when in talks of forming a gas cartel. There wasn’t much follow up to it, probably because prices have been falling in a [...]