29.11.202111:32 Forex Analysis & Reviews: Oil supply is depleting

Energy prices in Europe are breaking records even before winter begins. The spike observed in the UK last month has prompted some industrial companies to cut production and seek government assistance.

For governments, the situation could lead to tensions with neighboring countries. But for households, this means that they have to use less energy or be ready for power outages.

Sadly, it seems that nothing will change because Qatar recently said that it will only produce the amount it can. The industry will have to rely on reduced demand, said Rysted Energy analyst Fabian Roenningen.

France is particularly at risk because colder weather in January and February will significantly affect operation. In addition, the availability of nuclear power plants remains low and electricity prices are the highest since 2012.

Things were already tense last winter that network operators had to urge households to use less energy during peak hours. They also had to make contracts with producers to reduce demand. After that, they had to lower the grid voltage and then cut the electricity off for two hours in each region.

Since France is a key exporter of electricity to neighboring countries, the crisis will be reflected in Germany, Spain, Italy and the UK. Demand is forecast to peak at 80.7 gigawatts on Monday, far from the record 102 gigawatts since February 2012.

The situation in Switzerland is no better, and on November 16, Trafigura CEO Jeremy Weir said there is a high probability of repeated power outages.

These news led to natural gas halting at around $ 5.

The long-awaited launch of the Nord Stream 2 gas pipeline should have eased the energy crisis, but it was postponed due to regulatory hurdles. It is unclear when it will be approved.

Qatar also said it is already producing gas at full capacity, so it is unlikely that they will ramp up production. They ordered six LNG vessels from South Korea, in addition to four tankers purchased from China in October.

If things go badly, countries may limit the sell-off of natural gas to other regions. All except the European Union because they will not block the export of electricity or gas, especially when it comes to supplies to households.