Europe's Energy Costs See Biggest Two Month Jump Ever

Tyler Durden's picture

Between a weaker EUR and Middle-East tensions, Europe faces a very significant (and real) drag on its economic performance. Forget the 'grow our way out of it' or 'believe-me' memes, the crude reality (that we warned about last week) is that the cost of buying spot Brent Crude in Euros is very close to record highs, above 2008 highs and most worryingly, has seen the biggest rise on record in the last two months. For those wondering what the trade-off is to Mario Monti's pointless blustering and scorched-earth hostage tactics at the June 29 Summit, just look at the 'Total' line item, the next time you gas up.


Spot Brent crude priced in Euros - record two-month rise (lower pane) and very near-record high overall...


Charts: Bloomberg

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EnslavethechildrenforBen's picture

Do any of you actually believe that we still have any petroleum reserves left?

smiler03's picture

So how long do you think we can keep the lights on for?

Flakmeister's picture

Considering that a very small fraction of electricity is generated with oil in NA, I would say quite a while....

camaro68ss's picture

oil? All i need is a shovel and i can dig it out of the ground for $10. hahaha


Olde but goode

SRSrocco's picture


Well, it looks like AVAILABLE NET OIL EXPORTS peaked in 2005... and we just go downhill from here.  Even though overall global liquid production may be at a current peak, net exports only decline further from here.

According to Jeffrey Brown, calculating a mere 1% annual decline rate in global oil production until 2020, AVAILABLE NET OIL EXPORTS (minus China & India) decline from 35mbd in 2010 to 16-17 mbd by 2020.  It doesn't get more SOBERING than that.


I am currently doing research on the fuel (diesel) consumption of the top 8 gold miners, and let me tell you.... the overall trend is a DOUBLE IN DIESEL CONSUMPTION PER GALLON PER OUNCE OF GOLD in the past 6 years:

For example:

BARRICK 2005 gallons of diesel per oz of gold = 15.4 gallons / oz

BARRICK 2012 gallons of diesel per oz of gold = 29.0 gallons / oz

Most of the other top gold miners have either doubled or increased their diesel consumption significantly per oz of gold production in the past 6 years.


midtowng's picture

But the price of gold has more than doubled since 2005 as well.

101 years and counting's picture

europeeons are broker and broker, courteous of your friendly, local madman....errrr, central liar.  central printer.  central fuck.  central pig.  central douchebag. you pick.

Bastiat009's picture

Politicians (when they're not on vacation which makes problems go away by the way) and pundits love to explain that a weak currency makes people rich ... well, except when you have to pay for things.

bnbdnb's picture

Bye bye temporary GDP recovery.

NEOSERF's picture

Luckily most citizens in Europe can walk from one side of their country to the other in 4 hours...

CrashisOptimistic's picture

True, but they can't carry food for millions on their backs.

Trucks feed cities, and they burn oil.

Until they can't get enough to burn.  Then the cities aren't fed.

css1971's picture

Trains, trams, canals.

Then there are new technologies like UltraPRT starting to appear.

Most European cities are pre-automobile. Which becomes blindingly obvious when you try to drive through one.


bank guy in Brussels's picture

And seriously, cars here are more 'toys', with our superb and quite cheap public transport

In Belgium it is extremely inexpensive to have monthly or yearly free passes where you ride all means of public transport in the region for free, without limit

We have long had what Americans see as $8 or $10 per gallon gasoline ... using litres and euros here of course ... but this is decades-old policy to keep cities livable, discourage suburban sprawl and incentivise use of public transport

And it works very well, even supporting democracy ... people live together in cities and towns and can get together to demonstrate and riot on short notice

Precious's picture

STFU - you NATO occupied troll.

Ghordius's picture

either he is a troll - then junk and ignore - or you have a point to make, in which case I'm waiting, my precioussssssss... <need a fight, need a fight>

Precious's picture

Tell me why you would get it, Ghordius Van Damme? 

Brussels Guy and you probably work out at the same Eurofag gym in matching bike tights.

Ghordius's picture

LOL, that made my day, thanks - I was thinking more about a fight here, perhaps about urban sprawl or something

I find Brussels extremely boring and dull, you could not hold me there. And I agree, Brussels Guy has a "feminine touch" when he talks about his city... harharhar

Precious's picture

If the dude gets any more full of himself, he won't fit through the bank door.

Ghordius's picture you owe me a keyboard...

Abraxas's picture


Well, that'll change soon, when all of Europe becomes one country, under one leadership and one currency. Ein Volk, Ein Reich und Ein Fuhrer! Sieg Heil! (a wave of epileptic convulsions going through the rabid masses)

Ghordius's picture

and your evidence for this trend is...? do you have a timeline?

Abraxas's picture

Me? No man, I have no evidence. I'm just messin' around. What the hell do I know.

Ghordius's picture

you mean I know nuffin', gov'nor? there was an English joke about that...

AG BCN's picture

Yup, just drove past a Repsol garage 20 minutes ago and was surprised to see Diesel at Euro 1.50/litre 

In early 2007 it was 1.00/litre. 

Spain is in deeeep caca.

scatterbrains's picture

See if they would only print faster they could get out ahead of these little blibs in energy prices before anyone even notices.

Pretorian's picture

They will ban Oil SHORT selling if they dont like it . Oh no they will ban all LONG





DavidC's picture

Is this why stocks are up today? I don't understand...


CrashisOptimistic's picture

Stocks are up because the world hasn't caught up to realizing that there is no longer a market.

Just ignore it.  Buy farmland.  It's the only thing that will still have value in 5-10 yrs.

tahoebumsmith's picture

Austerity+Inflation=<GDP> They might just as well start handing out the pills because the pain has only just begun...

Jack Burton's picture

Energy hits Europeans harder now than it once did, they adopted a love affair with the automobile and have not looked back for decades.

The UK for example was paved over in great leaps, as was Sweden. People used to rely on public transport, now as many as possible drive instead.

Fill up your car in the UK or Sweden, Ouch! But at least the drive distances are shorter than in the USA. ANd cars tend to get good milage. In Sweden I drove a little VW and yes it was expensive to fill, but once full I drove for weeks before another fill up!

Just filled my RAV4 here in the USA, it was pretty steep expense and my driving distances here are pretty long. 25 miles to a decent store, the same for Doc and dentists.

Abraxas's picture

Neoconservativism, neo liberalism, neofashism, neocommunism ... just different names for the same thing.

LawsofPhysics's picture

Redundant, all fiats are losing value.  What is oil priced in gold, bitchez.

diogeneslaertius's picture

the new world order is the old world order


kleptocratic plutocracy, now with borg velociraptors drones, and extra liquidity!

-1Delta's picture

and the energy value of corn.... talk about a tight spot when USDA estimating sub mandated levels of ethanol usage with ethanol at discount to RBOB...


Hype Alert's picture

Money printing will get you inflation.  Success!   The people should be happy.  It was all done to save them you know.

orangegeek's picture

WTI Oil is retracing - has some upside around $98 per barrel. Wave 3 down will likely follow.

ekm's picture

Finally. Thx ZH.

The only thing that actually matters is the crude oil price.

Crude oil price higher, economy goes shit

Crude oil price lower, economy rebounds.


Why is this so difficult to understand?

Flakmeister's picture

When people believe crap like that there is a trillion barrels of oil off limits in the US, it is amazing what they can come up with when trying to rationalize things....

etresoi's picture

There is plenty of oil available in Iran and the sanctions hurt the European economies more than they hurt the Iranian.

Flakmeister's picture


Hey. I thought the (pick one)

a) Saudis

b) Iraqis

c) Little Green Men on Titan

d) All of the above

was going to replace those Iranian exports?


ekm's picture

There's two kinds of demand:

1) Consumption

2) Storage


Everybody knows number 1 has been going lower and lower, hence number 2 remains until everybody's storage is full and they have to unload. No different from 2008-2009.

Iran's ground storage is full and offshore storage is half full based on what I read recently.

China is storing and storing and storing.

Cushing is almost spilling over.

The time will come, guaranteed.

Flakmeister's picture

Here is Cushing

And is the total stocks excluding the SPR

Cushing is about 4%.....

Ummm.....  Do you want to rephrase what you said?

ekm's picture

Ok, there's more space. I am at work and can't focus on the charts you linked.

How long can they continue like this?

(I did NOT down you, below).

Flakmeister's picture

Would you like me to post links to the OECD stocks as well?

Your claim about 2008 is dead wrong....

How long can they continue what exactly??


(PS I don;t give a flying fuck about up or down arrows...)

ekm's picture

Ah ok. OECD data!

This is like data from China or from BLS. Random data generator. Even Cushing data is just by WH order.

How can there be drops in storage when the demand is lower?

A private crude oil trader can store at Cushing maintaing ownership of the crude oil. Only when the ownership is transferred, is the data reported as increase of crude storage.

Flakmeister's picture

Umm... do you know where the OECD data comes from?

Hey, if Cushing is just what the WH says it is, why didn't W. step in duing '08???

You can have drops in storage if supply drops greater than demand...

Or did you think that oil production can only increase????

Did you also know that the amount of crude on the market is down ~10% since 2005? 

ekm's picture

Oh I see where is the disagreement.

I believe no data, none whatsoever. Data is out there in order to mislead to lure suckers.

I always check that data with feedback from other sources on the internet.

But again, if your investing is based on that data, it's your choice.

ekm's picture

Ok. Thx for the debate. Very enjoyable.