BAKU, Azerbaijan, Sept.14
By Leman Zeynalova – Trend:
The risk of an energy crisis in Europe this winter continues to rise, Ole Hansen, Head of Commodity Strategy at Saxo Bank told Trend.
ICE exchange data shows that gas prices in Europe exceeded $800 per 1,000 cubic meters during trading on September 14. The price of the October futures on the TTF hub in the Netherlands reached $80.2 per 1,000 cubic meters.
He noted that stocks and supplies remain low ahead of the winter heating season starting in about a month from now.
“Forecasts for unfavorable market conditions in the Northern Hemisphere due to lower production and higher demand have led to a price hike for gas in Europe and Asia. The US has also faced supply outages in the Gulf of Mexico following the Hurricane Ida, which drew back around 1.7 billion cubic feet per day, or 2 percent of the daily output in the US, thereby jeopardizing the efforts to boost the reserves ahead of the peak winter demand,” said Hansen.
The analyst pointed out that global supply outages caused by the strong economic growth, hot weather and lower supplies from Russia to Europe gave a serious impetus to the sector.
“This led to high electricity bills, surge in coal prices as a substitute and with that also the rising cost of carbon emissions offsets. With lower gas reserves in Europe and Russia, possible gas crisis in winter is a real threat for consumers and the industry. Some companies may even reduce their production so that to curb demand.”
---
Follow the author on Twitter: @Lyaman_Zeyn