Natural gas prices in the UK and the continent of Europe hit record highs due to tight supply ahead of winter, causing serious economic damage to industry and concerns about weather shortages. UK previous day prices rose 7% on Tuesday to over £ 1.65 per therm, almost triple the level at the beginning of the year and rose 70% in early August alone. Since gas is the key to power generation, it also pushes record electricity prices. But what caused the gas crunch before winter heating demand began in earnest? How does it affect the home? Concerns over supply shortages began in the protracted cold winters that depleted natural gas storage. This is usually replenished in the summer when the demand for heating evaporates significantly.
However, storage filling is not occurring at the pace traders wanted in 2021. Russia Sending Less gas To Europe because of intense debate in the industry. These range from the need for Russia to replenish its own storage to suspicions that it is trying to pressure European governments, including Germany, to approve highly controversial start-ups. Nord Stream 2 Gas pipeline. Europe has also phased out coal plants in recent years, limiting the opportunity to switch fuels when prices rise. Record carbon prices also make fuel swaps less attractive, as coal emits more carbon dioxide when burned.
FT 14th Sept 2021 read more »