GAS: another tragic price spike with the General winter just around the corner
A combination of causes is sending European gas futures to the skies, at last week's highs. These causes are:
- the Nord Stream 2 gas pipeline inactive and not yet approved;
- the lack of enthusiasm shown by the new green foreign minister for its approval;
- a Russia increasingly irritated by these delays and Western provocations in Ukraine;
- the coldest weather forecast until the end of December,
triggered a rally in European natural gas futures. Energy prices in Germany rose to a record high, while energy prices in France rose to a decade high. The Dutch futures market showed a second peak.
Concerns that the Nord Stream 2 pipeline will not go into action this winter comes when the new German Chancellor Olof Scholz said his government "will do everything it can" to ensure that the flows of natgas continue through the Ukraine and not the last Russian-German submarine pipeline. Foreign Minister Annalena Baerbrock clearly stated that approving Nord Stream is not at all talked about. Last month, German energy regulators suspended the Nord Stream 2 certification process. The United States also sanctioned companies affiliated with the construction of the pipeline.
In addition to geopolitical uncertainties, mixed with scarce natgas supplies across Europe, among the lowest in a decade, a new 14-day weather forecast shows cooler-than-average weather, which will increase demand for natgas.
UK gas futures also rose 10% to £ 294.07.
The cooler climate on the continent has increased the demand for energy. German energy contracts added 9.7% to a record € 205 per megawatt hour. French energy contracts have risen to 329 euros per megawatt hour, the highest ever.
This winter, Nord Stream 2 was supposed to be Europe's saving grace as stocks across the continent are well below seasonal trends. Without additional supplies, as storage is rapidly running out, natgas prices will likely continue to rise, forcing energy prices to rise.
Citigroup wrote a note Monday saying gas prices in Europe are rising due to "a nervousness surrounding demand in the remaining winter months."
However, it would be wrong to think that the European energy crisis was caused by a cold winter. This is the result of demagogic and wrong energy policies, made over the years by those who never pay for their mistakes. Betting everything on natural gas, also making it the benchmark for energy prices is a tragic choice that is damaging companies and citizens of the Old Continent.
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The article GAS: another tragic price spike with General winter at the gates comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/gas-altro-tragico-picco-dei-prezzi-con-il-generale-inverno-alle-porte/ on Tue, 14 Dec 2021 10:12:10 +0000.