Europe’s Home Bills Impacted By Gas Price Hike Of Over 30% – Cryptovibes.com – Daily Cryptocurrency and FX News
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As supplies flow east for the 15th day in a row, the rise in gas prices comes amid ongoing concern about the intentions of Russia.
As supplies that usually come into Europe from Siberia continued to flow eastwards for the 15th day in a row, European gas prices have risen by more than 30% on January 4, adding to mounting concerns about the cost of heating a home.
After gas coming through the Yamal-Europe pipeline reversed direction three days before Christmas, the Kremlin has repeatedly denied using Russia’s vast gas resources to turn the screw on Europe.
The eastwards flow of gas has increased, with volumes hitting almost 9.9m kilowatt-hours an hour (kWh/h), up from 5.8m previously as shown by data from the Mallnow metering point on the German-Polish border.
On Tuesday morning at the Mallnow metering point on the German-Polish border, data showed that eastbound volumes via the Yamal-Europe pipeline hit almost 9.9m kWh/h up from 5.8m previously.
Rather than relieving price pressure, the Russian president, Vladimir Putin, said last month that Germany was reselling Russian gas to Poland and Ukraine, blaming German gas importers for the reversal of flows and soaring prices. The German government has declined to comment on Putin’s remarks.
By mid-afternoon on Tuesday, the benchmark Dutch front-month gas contract was up 32% at €95.20 (£79.40) a megawatt-hour (MWh), with the day-ahead contract up €29 at €95.50 MWh. At 236p a therm, the UK’s wholesale natural gas benchmark, the National Balancing Point, was up 38%.
Since 2021, when the lifting of Covid-19 restrictions put huge demands on depleted stocks of natural gas, Europe has been at the heart of an energy crisis. Having more than quintupled since January 2021, benchmark prices have been squeezing consumers and companies and threatening the region’s economic recovery.
Amid a broader cost of living crisis, energy suppliers in the UK are piling pressure on the government to act to bring prices down having warned that average gas bills could rise to more than £2,000 a year in April when a cap on prices is revised upwards.
Although the main driver to upward pressure on prices was the low Russian gas flows, expectations for colder weather in Europe were contributing, as highlighted by one trader.
Signaling their optimism that the Omicron variant of Covid-19 will have only a short-term impact on global growth, the OPEC+ cartel of oil-producing nations separately resolved to press ahead with plans to increase output.
Led by OPEC member Saudi Arabia and non-member Russia, the 23-member alliance stuck to a plan for a modest output increase of 400,000 barrels a day in February. The addition is part of a gradual unwinding of the 10m barrel-a-day production cuts made in 2021 as travel and transport slowed drastically.
Last year, as the global economy began to recover from the depths of 2021, Brent crude rose 50% and so far in the early days of 2022 it has rallied, trading 2% up above $80 (£59) on Tuesday. To help keep a lid on prices to avoid crashing the nascent demand for fuel and slow that recovery, the US had urged OPEC and its allies, led by Russia, to increase output.
Compared to what the US called for, the oil-producing nations opted for a slower increase. However, any rise in the volume of crude they pump indicates confidence that Omicron is not causing demand for fuel to plummet.
The variant would be “mild and short-lived” and was upbeat about economic prospects, OPEC said in a technical report. The joint technical committee report said:
“This is in addition to a steady economic outlook in both the advanced and emerging economies.”
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