The European gas price continued its inexorable rise this Friday to close at a new record, driven by the closure “for maintenance” of Nord Stream by the Russian giant Gazprom for several days. The difficulty of the European Union to accumulate sufficient reserves to be able to dispense with Russian exports during the winter without creating shortages has caused the price of the Dutch TTF futures contract to have shot up to 257.40 euros at the end of the session.
During the session, it had only broken above this level during the extremely volatile early days of Russia’s invasion of Ukraine to reach an all-time high on March 7 at €345. While Gazprom has claimed that gas deliveries will resume after a shutdown from August 31 to September 2, the market remains nervous: the European Union accuses Moscow of using gas as leverage in the context of its invasion of Ukraine. .
As a result, the German energy regulator said on Thursday that the country risks missing its goal of filling its reservoirs set by the government of Olaf Scholz. The chef du régulateur Klaus Müller averti que des pénuries étaient à attendre dans certaines régions durant l’hiver, et qu’il ne s’agissait “pas d’un hiver mais d’au moins deux, et le deuxième hiver pourrait être encore more difficult”.
Europe is painfully trying to disengage from Russian gas, on which Germany is particularly dependent. In Germany, from October 1, importers will be able to charge 2.4 cents more per kilowatt hour (KWh) of gas to companies and individuals. Even if the government has promised to write it off for the most modest, “the October bill shock should lead to a reduction in household demand,” comment analysts at Deutsche Bank.
the electricity goes on
Electricity, for its part, mechanically follows the evolution of gas prices, because the market looks at the cost of gas (and coal) at the plants called to the rescue to ensure the balance of the system. Prices were buoyed “by low wind levels (for wind power) as well as high coal and gas-fired power costs,” analysts at Rystad Energy said.
At the same time, an especially hot summer limited electricity production: the heat wave affected the cooling systems of nuclear power plants, and the drought prevented barges from carrying coal to German plants. However, the heat wave stimulates electricity consumption for air conditioning and ventilation, limiting the usual drop in the summer months.
Electricity for delivery next year in Germany topped 500 euros per MWh for the first time in recent days, up from just over 300 euros in early July. “This could be Europe’s biggest energy crisis for at least a generation,” warns John Plassard, an analyst at Mirabaud.
oil down
Following gas prices, oil, which had started the session lower, rebounded: +0.76% to $97.32 for the European benchmark, North Sea Brent for October delivery, and +1.14 % up to $91.17 for American West Texas Intermediate (WTI) due in September. The price rebound is not convincing all observers.
He notes that volumes are particularly thin this summer, promoting greater price volatility and pushing the analyst to give little credit to the rally that began on Wednesday after a surprise drop in US stocks. “A global recession that would destroy demand remains the main concern, with some gloomy data coming out of the eurozone and China,” he added.
On Friday, the strength of the dollar, fueled by the prospect of a tightening of monetary policy in the United States, also weighed on oil. Since the dollar is the reference currency of the oil market, its rise weighs down the purchasing power of investors who use other currencies.
Source: BFM TV
