European gas prices continued their inevitable rise on Friday, buoyed by the EU’s difficulty accumulating enough reserves to do without Russian exports over the winter without creating a deficit.
The Dutch TTF futures contract, Europe’s benchmark for natural gas, traded at 249.00 euros (239.54 francs) per megawatt hour (MWh) at 11:50 GMT (1:50 pm CET), a level not seen since. Trade from the very turbulent early days of Russia’s invasion of Ukraine.
On Thursday, it closed at an all-time high of 241 euros per megawatt hour.
However, it is far from the all-time high of 345 euros reached on March 7.
Germany’s energy regulator warned on Thursday that the country could miss the reservoir-replenishment target set by Olaf Scholes’ government.
The regulator’s head, Klaus Müller, warned that shortages could be expected in some areas in the winter and that it would be “not one winter, but at least two winters, and the second winter will be even harder”.
Europe is painfully trying to wean off Russian gas, which is particularly dependent on Germany, and which Moscow is using as a means of pressure behind its invasion of Ukraine.
In Germany, since October 1, importers can charge companies and individuals an extra 2.4 cents per kilowatt hour (KWh).
Although the government has promised more modest monetary easing, “the shock from the October bill could lead to lower housing demand,” analysts at Deutsche Bank said.
Increased power consumption
Electricity, for its part, mechanically follows the evolution of gas prices, because the market is set on the price of gas (and coal) power plants called for recovery to ensure the balance of the system.
Prices are “driven by lower wind volumes (for wind power) and higher costs for coal and gas energy,” analysts at Rystad Energy said.
At the same time, a particularly hot summer limited electricity production: a heat wave affected the cooling systems of nuclear power plants and drought prevented coal from being brought into German power plants.
However, the heat wave also boosts electricity consumption for air conditioning and ventilation, limiting the usual drop in summer months.
Electricity for next year’s supply in Germany exceeded 500 euros per MWh for the first time in recent days, compared with just 300 euros in early July.
“This could be Europe’s biggest energy crisis for at least a generation,” warns John Plassard, a researcher at Mirabad.
Oil down
Less dependent on the European market, oil prices fell 2.07% to $94.59 on Friday, while Brent from the North Sea for October delivery and US West Texas Intermediate (WTI) were down 1.99% to $88.72. It expires in September.
“There are plenty of reasons to bet on the decline, but market players seem to have forgotten them for a couple of sessions,” said Stephen Brennock, analyst at PVM.
He points to volumes being particularly thin this summer, encouraging increased price volatility and prompting analysts to give little credit to the rebound that began Wednesday after a surprise drop in U.S. stocks.
“A global slowdown that is eroding demand remains the main concern, with some bleak data coming out of the Eurozone and China,” he added.
On Friday, the dollar’s strength, boosted by the prospect of tightening monetary policy in the United States, also weighed on oil.
As the greenback is the reference currency of the oil market, its rise depends on the purchasing power of investors using other currencies.
This article was published automatically. Sources: ats / awp / afp
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