Gasoline prices retreat from record highs amid energy crisis; UK’s £ 1bn Covid bailout slammed – business live | Business

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The gas price crisis in Europe is tightening, as the winter cold spell spikes demand and geopolitical tensions between Russia and the West escalate.

Wholesale gas prices for the UK and mainland Europe have reached record highs, stepping up pressure on energy suppliers and users.

The day-ahead price for UK gas hit 457p per therm on Tuesday, up 20% in one day, and around seven times higher that at the beginning of this year.




The day-ahead price of British natural gas Photograph: Refinitiv

The first month’s wholesale price of Dutch gas, the European benchmark, rose more than 16% to a record low of 171.40 euros ($ 193.46) per megawatt hour on Tuesday, while the equivalent UK gas contract also hit a new high at 4.29 pounds ($ 5.68). ) per therm.

The jumps came after the key Yamal-Europe gas pipeline that carries Russian gas to Germany passed east rather than west into Europe – a move, according to the Kremlin, had no political implications .

Gas prices had already risen in recent weeks after Germany suspended the approval process for Russia’s controversial Nord Stream 2 pipeline. could face US sanctions if Russia invaded Ukraine, where tens of thousands of Russian soldiers are close to the border.

Kremlin spokesman Dmitry Peskov said on a conference call Tuesday,


“There is absolutely no link (to Nord Stream 2), this is a purely commercial situation.”

James Waddell, responsible for European gas at Energy aspect, explains why uncertainty over gas imports is a problem:


“Europe has very little storage buffer this winter and the balance in Europe is therefore much more dependent on imports than in previous years”,

“In addition, Gazprom has traditionally shipped around 20% of its supply to Europe via Poland, but these flows have been inconsistent this year and have increased uncertainty about how much gas Europe will actually receive from the market. Russia.”

The temporary shutdown of two French atomic reactors, after the discovery of faults in the pipes of a security system, also increased the demand for gas.

Soaring gas prices mean UK household bills look certain to climb sharply next April, when the next price cap review by regulator Ofgem comes into effect.

Investec estimates the cap could be raised from £ 1,277 per household to around £ 2,000, meaning millions of UK households could see their bills rise by more than 50% unless the government takes action to cushion the blow.

Also coming today

Rishi Sunak has been accused of not doing enough to help struggling hotel companies ride the Omicron wave after refusing to reinstate leave for the hardest hit businesses.

Yesterday’s £ 1bn bailout of business grants and sickness benefit aid was called a ‘Christmas Day failed cracker’ and ‘too little, too late’. Unions warn he has not provided enough support to workers; the TUC estimates that 238,000 hotel workers are not entitled to statutory sickness benefits.

Michael kill, the chief executive of the Night Time Industries Association, said a stammering open / closed approach to government restrictions “is crucifying business” during a pivotal time for trade before Christmas.


“Every help book is essential. But this package is far too small and bordering on insulting.

European markets are expected to open a bit higher, having rebounded from Monday’s massive selloff yesterday.

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European opening calls:#FTSE 7307 + 0.13%#DAX 15,492 + 0.29%#CAC 6989 + 0.34%#AEX 778 + 0.38%#MIB 26713 + 0.22%#IBEX 8392 + 0.06%#OMX 2326 + 0.29%#SMI 12,729 + 0.36%#STOXX 4189 + 0.34%#IGOpeningCall


22 December 2021

Agenda

  • 7:00 GMT: UK third quarter GDP report (final estimate)
  • Noon GMT: Weekly US Mortgage Applications
  • 13:30 GMT: Third Quarter U.S. GDP Report (Final Estimate)
  • 3 p.m. GMT: Existing US Home Sales for November
  • 3:30 p.m. GMT: Weekly figures for crude oil inventories in the United States



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