Because the price of gas in Europe will continue to gas
The price of gas in Europe has reached 241 euros per megawatt hour. The causes and the comments of the analysts
The gas price race in Europe continues after the two records recorded at the end of yesterday and Wednesday at 241 euros per megawatt hour and 227 euros respectively. Of course, we are far from the historic intraday peak reached again on 7 March at 345 euros.
THE WORDS OF BESSEGHINI (ARERA) ABOUT PRICES AND GAS
"The price of gas is stable at high values and this will be transferred to the system, with impacts on industrial supply chains, on supply and on citizens' bills – the president of the Arera told Corriere della Sera – the Energy Regulatory Authority networks and environment – Stefano Besseghini – with these price levels, however, the cost of energy becomes unsustainable also for other sectors of the economy and for middle-class families, unless the EU intervenes "by pushing" with a decisive reduction of consumption to reduce the centrality of gas ”, making explicit“ a ceiling on the price of gas or another mechanism that allows for greater control over Ttf prices. In addition, it could be temporarily the retailers market, the securities linked to the emission of CO2, with an effect in particular on the electricity market. Any intervention, European or national, must however take into account "the complexity of the energy system".
THE HEAT, RUSSIA AND LITTLE WIND
The strong demand for the weather conditions, with the heat wave that forces people to keep the air conditioners on, drives consumption. The lower supply due to Russian cuts and speculation also pushed prices up. Prices have been driven "by little wind (for wind power) and high costs for coal and gas-fired power," analysts at Rystad Energy said. A bit like that which happened exactly last summer, well before the Russian invasion of Ukraine, when the so-called 'energy crisis' began with the subsequent increase in costs caused by the recovery of insufficient demand.
The particularly hot summer limited electricity production: high temperatures hit the cooling systems of nuclear power plants and drought prevented barges from bringing coal to German power plants. The heat is increasing the consumption of electricity to cool the rooms and ventilation, limiting the consumption decrease in consumption in the summer months.
THE ANALYSIS OF MIRABAUD AND PVM
"This could be the biggest energy crisis in Europe for at least a generation," said John Plassard, an analyst at Mirabaud. “There are many reasons to bet on a drop. But the market players seemed to have forgotten them, ”comments Stephen Brennock, analyst at PVM, adding that volumes are particularly low this summer, which favors greater price volatility. "A global recession that would destroy demand remains the main one, with some negatives coming from the eurozone and China," he added.
GAS PRICES TEN TIMES HIGHER THAN A YEAR AGO
For Mark Dowding, BlueBay's chief investment officer, "wholesale gas prices in Europe are now 10 times higher than last year".
THE CONSEQUENCES
Meanwhile, the recent drought in Europe is exacerbating the food situation and fertilizer shortages highlight the risk of a further decline in supply in the coming period. "Due to these effects", concludes Dowding, "it seems likely that the Eurozone Hon will only reach its peak at the beginning of 2023, while in the UK the consumer price index is set to remain in double digits. for the months to come, with a possible peak around 15% in the first quarter of next year "
GERMANY
Germany is among the hardest hit European countries due to its dependence on Russia and warned yesterday that it may not meet its stock fill target.
LNG, ASIA AND THE RENO RIVER
Following European prices, spot LNG prices were just below $ 60 per million Btu on Wednesday, the highest level since early March. "An increase in demand from Asia as buyers prepare for winter could increase the number of direct cargoes to the region in the coming months," BloombergNEF analyst Lujia Cao wrote in a statement.
Meanwhile, the water level on the Rhine River is expected to rise in the coming days thanks to the rains, which could provide a respite to the crisis that has limited the passage of barges on the water. However, the river is still historically low. The situation on the Rhine has exacerbated Europe's energy crisis.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/perche-il-prezzo-del-gas-in-europa-continuera-a-gasarsi/ on Sat, 20 Aug 2022 06:14:24 +0000.