Can you imagine an analysis of gas prices that reads like a thriller?
Here's how he sets the context, in a gripping way:
The rest of the thread is a mind-boggling series of facts - all of which taken together result in the seemingly absurd situation of the UK seeing high consumer gas prices despite a supply glut.
Here are the summarised facts:
There's a contradiction in the UK natural gas supply and pricing scenario
- Natural gas wholesale prices in the UK is the lowest in 18 months (much lower than the EU price) due to a supply glut
- But consumer prices in the UK are still very high
The supply glut is driven by unique historical and geographical factors:
- Given the Ukraine war, Europe wants to reduce piped-gas supply from Russia
- Capacity on other (non-Russian) piped-gas supply sources like N. Africa and Azerbaijan is maxed out
- So EU has to depend on gas from a different source - LNG tankers
- But LNG needs to be unloaded on special terminals
- Europe (perhaps because of its dependence on cheaper piped gas) does not have enough LNG terminals
- But the UK does have them.
- So the UK is receiving a ton of additional LNG supply, a lot of which is ultimately bound for Europe through two dedicated pipelines. Read more in this part of the thread.
- But UK's ability to ship gas to EU is (surprise, surprise) limited by its own pipeline capacity
- UK's own consumer demand is lower now
- And the UK has limited storage capacity for gas, since it retired its biggest storage reservoir a few years ago
- So basically, a lot of gas coming to the UK, which can't be shipped, sold or stored... and the resultant supply glut is depressing current wholesale prices
- but then...
Why does the domestic gas price in the UK continue to be high:
- Because that price is not determined by current wholesale prices. It is based on 'year-ahead' prices... which continue to be high
Overall, a gripping analysis and storytelling of the situation. Three storytelling techniques used by Ed Conway in the thread:
- Start with mystery and pique the audience's curiosity
- Use contrast (e.g. between supply glut and high prices)
- Then control the release of information (one idea per tweet)... and build the flow between tweets
- Use simple, clear visuals
And presto - you've got yourself a thriller on gas prices!
PS: Here is the context for #SOTD and the 'Ultimate Guide to Storytelling Techniques' framework I use - in case you joined this series late! Here is the archive of previous posts. Click here to subscribe.