In the second quarter of 2022, as the country’s cost-of-living issue took hold, the U.K. GDP
This winter, Europe is frantically trying to avert an energy calamity that might spark an additional economic and financial crisis.
As traders responded to Russia’s late-Friday decision to keep its main gas pipeline down indefinitely, gas prices increased by more than 30% on Monday. The euro fell as well. Policymakers are currently debating how to sharply reduce demand while also preventing volatile market swings from causing a wider financial disruption.
Poll Finding: Italians Are Sick of Sanctions (8:50 a.m.) According to a recent study, a growing amount of Italians want the sanctions against Russia lifted in order to stop the inflation and skyrocketing gas costs. According to a Termometro Politico poll released on Saturday, 51% of respondents supported lifting sanctions while 44% support having them in place. According to a Quorum/YouTrend poll conducted by SkyTG24 on Monday, as many as 43% of Italians believe that it was wrong to impose them in the first place.
Power prices increase (8:45 a.m.)
Europe’s wholesale electricity costs increased as a result of the Nord Stream shutdown, which increased the cost of operating gas-fired power facilities. German electricity prices for the following month increased up to 16%, and the benchmark price for the entire year increased by 21% to 615 euros per megawatt-hour. Early last week, that benchmark rose above 1,000 euros.
The Flows in Hungary are fine (8:30 a.m.) According to state secretary for the foreign ministry Tamas Menczer, gas deliveries to Hungary are continuing as usual. The only pipeline route through which supplies have not been interrupted this year is the TurkStream link, via which the country, which has rejected harsh sanctions against Moscow, receives Russian gas. According to officials in Hungary, Russia is even supplying more gas to the country than is specified in their deal.
German Storage Continues to Build (7:33 a.m.)
In anticipation of a Russian gas cutoff, the European Union has been increasing its gas reserves. With storage facilities approximately 82% full, it will have enough gas for at least part of the winter. Germany is the region’s economic engine, and storage facilities there are currently 86% full, according to Gas Infrastructure Europe. However, even with gas storage at 95%, Klaus Mueller, head of the Federal Network Agency energy regulator, issued a warning last month that if Russia cut off deliveries, there would only be enough to meet demand for 2-1/2 months.
Leaps in European Gas (7:15 am)
Given the shortage of gas, JPMorgan analysts wrote in a note that one cannot rule out forced gas curtailments for non-essential industries or even “rolling gasouts” this winter, depending on the weather. According to Goldman Sachs, European gas prices may soon surpass record highs reached in August following Russia’s action.
Ukraine’s Gas Flows Are Stable (6:30 a.m.)
According to data, Russian gas shipments via Ukraine are still steady. Since May, when one of the two crossing sites was made inoperable, flows have been reduced. With Nord Stream shut down, the flows through Ukraine will come under greater scrutiny. Seasonal work has also reduced the flow of Norwegian gas.