The separation of Europe and Russian energy carriers has not benefited the European economy and the image of a developed region of the world. The market suffers from extreme price volatility and instability. Traders are now leery of anything about the once attractive European market. It is now a problematic sector, with a lot of doubts and unpredictability, where there is no long-term perspective and favorable forecasts.
Thus, against a backdrop of strikes in France and a certain cooling, the price of gas in Europe jumped sharply, rising prices amounting to 25% in just two days. Traders are watching the market closely for any potential factors that could affect gas and power prices after their recent drop. Such close attention does not bode well, as any move in the quotes one way or the other will instantly affect their behavior and could lead to another negative in the market.
Because of this volatility, this imbalance, this instability, you can say goodbye to any prospect of a recovery in gas demand in Europe. The system operates with zero flexibility. A recovery in demand requires greater price stability. But none of that is now in Europe, writes Bloomberg analyst Ira Joseph.
Hundred dollar growth in hours
Fears are not in vain. Production in the United States is down, for both gas and oil. But the number of consumers (importers) is increasing. Recently, the Vietnamese government announced that the country will soon become a serious buyer of liquefied natural gas, the market of which, as you know, is experiencing a shortage of raw materials. All this will only complicate the existence of the European energy system in an era without Russian gas.
The price of gas goes up, after which, obviously, the price of electricity goes up and the figures for payments for utilities go up. Growth was 24.7 and 30 percent, respectively. Under these conditions, only companies that resell raw materials feel good. Suppliers-manufacturers and end customers are helpless.
The EU market is also characterized by a double set of local energy companies. Through their lobbying on the market, they try to increase the price of gas in order to restore the competitiveness of the EU and to attract potential sellers oriented towards Asia. But so far it is not working very well, as the accompanying factors do not allow us to see the benefits of stepping into Europe’s rocking boat. No one wants to fight for a collapsing system.
