Gas prices: Putin ‘going to keep squeezing’ says expert
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In a Tweet with gas price increases on display, Javier Blas took to Twitter to address the dire situation. Using his experience in the energy sector, the correspondent demonstrated the notion that a price barrier had been broken.
Mr Blas wrote: “If I was the British Government, I would be rather worried about this chart; very, very worried. UK natural gas has now breached the equivalent to $40 per million Btu barrier (~300 pence per therm). In oil terms, it’s now trading above $230 per barrel of oil equivalent.”.
Adding to the piece, the analyst said: “And a reminder that during a supply crunch, natural gas prices go parabolic, reaching whatever price is needed to curtail demand. In Oklamhoma last winter that price was $999 per million Btu. So some could say that actually current UK prices are cheap.”
Taking the situation further afield, Mr Blas also issued a stark warning to the EU.
“I said the UK government mostly as I call London home. But Brussels (and every other European capital) should be worried too. Continental European gas prices are the same, inflicting a massive inflationary shock on the economies. Industrial production will be curtailed.”
European natural gas contacts for delivery in November leapt 23 percent to 117.50 euros a megawatt hour, up from just 18 euros six months ago.
UK prices have also soared as per the information provided by Mr Blas.
With prices tripling in the last three months, figures have reached £3 a therm for the first time.
The high energy prices being seen come from a sudden rise in demand since lockdowns eased, and well as moves by governments across Europe to take action to cut down on the use of coal.
Many nations across Europe, including Spain, Italy, France and Greece have already agreed subsidies to protect households from higher costs.
Speaking of the problem across the EU, the Commission President, Ursula von der Leyen acknowledged the role of Norway in the production of extra gas.
“We are very grateful Norway is stepping up but this does not seem to be the case for Russia.”
As the largest supplier of natural gas to Europe, Russia has tightened the taps on the flow of gas to Europe and has restricted pipeline exports to long-term contracts.
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Describing the situation in Europe, Russian President Vladimir Putin claimed the current problems in Europe are one of ‘hysteria and confusion’, blaming tighter supplies on under-investment in fossil fuels as economies move towards more renewable energy sources.
Tension has increased between Europe and Russia, with some Baltic nations accusing Russia of ‘weaponising’ natural gas supplies to secure the completion of the Nord-Stream II pipeline between Russia and Germany.
Record wholesale prices have led to the collapse of 10 retail energy providers in Britain since the start of August requiring millions of customers to be transferred to other companies, increasing the burden on them in the process.
The cost of supplying the average household in the UK with gas and electricity for a year has leapt to around £1,800, far above the £1,277 price cap.
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