UK and Europe gas prices rise higher than Russia-Ukraine concerns

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European and British gas prices hit record highs on Tuesday due to concerns that Russia’s potential invasion of Ukraine could disrupt the already growing energy supply in winter.

Benchmark prices for natural gas supplies in January jumped from a record high of € 116 / MWh on Monday to € 120.25 per megawatt hour. The UK equivalent rose to £ 3.04 in Therm, surpassing the record high of £ 2.94 on October 5.

European prices have skyrocketed by almost 30% since the beginning of this month, with record highs set in October when the recovery in the global economy boosted demand and Europe’s demand for additional gas supplies from Russia could not be met. Exceeded.

Russian President Vladimir Putin eased prices last month with an original promise to raise supply, but European storage facilities have not yet been replenished and the cold has caused further drawdowns.

Julius Baer Strategist Norbert Lucker said: “More importantly, rising tensions between Russia and Ukraine seem to contribute to supply concerns and add a risk premium to prices.”

An estimated 100,000 Russian troops are stationed on the Ukrainian border, but world leaders have asked Moscow to escalate and pursue diplomatic solutions. US officials have warned that Russia may be planning to invade Ukraine early next year. Delay the controversial NordStream 2 There is also the risk of disrupting other supplies as well as the gas pipeline.

Continent Europe currently obtains more than one-third of its total gas supply from Russia’s state-owned Gazprom via two pipelines, one through Belarus and Poland and one through Ukraine. ..

Nevertheless, as the number of cases of Omicron coronavirus variants increases, the government may impose more restrictions, hurt economic growth and reduce energy demand.

The International Energy Agency said on Tuesday that it expects a surge in new Covid-19 cases to slow the recovery of oil consumption as air travel and jet fuel were hit hardest. Currently, global demand is projected to increase 3.3 million barrels per day in 2020, down 100,000 barrels per day from previous forecasts.

“The surge in new Covid-19 cases is not expected to temporarily slow the recovery of ongoing oil demand, but not to improve,” the IEA said in its latest monthly report released Tuesday. Stated.

However, analysts say there is no clear benefit to the European gas market other than the warm winter. Throughout Europe, gas storage facilities are currently only 62.8% full, more than 10% below seasonal standards. If the drawdown continues at the current rate, the storage level will reach a very low level by March or April next year.

UK and Europe gas prices rise higher than Russia-Ukraine concerns

Source link UK and Europe gas prices rise higher than Russia-Ukraine concerns

The post UK and Europe gas prices rise higher than Russia-Ukraine concerns appeared first on Eminetra.

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