MILANO – The tensions on energy prices continue, which worry the financial markets and are felt in the pockets of consumers with the rise in electricity and gas bills to block which the Italian government took the field with a 3.5 measure billion, published yesterday in the Official Gazette.
Dry storage and prices at historic highs
As it notes Bloomberg, the picture is of price peaks on international markets: with the approach of the winter season, which for obvious climatic reasons calls for greater energy consumption, the scarcity of raw materials and the prospect of an increase in demand can only exacerbate the situation. From natural gas to coal to water that fuels electricity production in Norway, the storage landscape is critical. “The balance between inventories and demand will remain unusually critical as the winter season approaches,” wrote the financial agency’s energy analysts, “adding further pressure to a market that is already at an all-time high. And from the operator itself. Norwegian network, Statnett, the latest alarm has arrived: the situation of the networks in the South of the country is critical and this could compromise energy exports which, via cable, reach the United Kingdom, Germany and Denmark.
There are signs of a further increase in energy prices from various quarters. From energy in Germany to gas in the UK, prices are at their highest. The price of gas in Europe, during trading on the Ice Exchange, exceeded $ 1,000 per 1,000 cubic meters for the first time in history. Futures for carbon emissions permits rose another 2.2%. In Italy, for example, the Energy Markets Operator set – in the week ended Sunday 26 September – an increase in the average purchase price of electricity (the so-called PUN) at 172.39 euro / MWh (+9.38 euro / MWh, + 5.8% compared to the previous week). Futures on natural gas contracts in the US are also up sharply: the October contract rose to its highest since February at $ 6.27 with a 10% jump after rising 11% yesterday.
China without electricity is asking for more coal
The expensive energy is forcing more and more governments to intervene. Italy did it, Spain was the first and now France too, in view of an update of the bills with double-digit percentage increases, is preparing to increase the energy bonus to support the poorest families.
China has now joined the picture of international tensions. The lack of energy has forced many industries to stop: among these also important suppliers of big westerners such as Apple and Tesla, reports Reuters. The situation is especially critical in the Northeast of the second largest economy in the world and represents a threat to the growth of the Asian power as a whole, considering that supply chains are already severely tested by the scarcity of raw materials, components, and the rise in costs. transport (especially maritime) and the accelerated restart of demand. According to Bloomberg Intelligence, at least 17 provinces and regions, equal to 66% of GDP, have announced forms of energy interruptions, especially in heavy industry. Record coal prices make electricity generation anti-economic despite the sharp surge in demand, while some areas have opted for a blackout to target emissions and energy intensity. And in fact, requests to accelerate coal imports have started, such as from the governor of the province of Jilin, one of the most affected, while an association of electricity companies has stated that the offer has been expanded “in every way possible “. Goldman Sachs, meanwhile, has cut China’s estimates of 2021 GDP from 8.2% to 7.8%, from 2022 to 5.5%.
Even oil in the waltz of the rises
What worries observers is that even oil is giving signs of tension, after having seen prices rise in recent times compared to the lows of the pandemic 2020, but without those extreme phenomena that had characterized other areas of the energy market such as gas. and Co2. In the wake of the strong demand and the decline in inventories, the Texas WTI rose to 76.3 dollars (+ 1.23%) while Brent reached 80 dollars, then advanced to 79.6. Yesterday Goldman Sachs estimated a level of $ 90 as possible for North Sea oil given the bullish market trend. A role in this dynamic is also attributed to the fact that the oil industry, due to the energy transition that is putting it out of action, has cut investments and is therefore less elastic and ready to respond to a sudden peak in demand.
Meanwhile, Italian consumers are complaining about new ones price increases at the petrol pump and – denounces the National Consumers Union – the race in fuel prices does not stop, which, in self-service mode, amount to 1.676 euros per liter for gas and 1,523 euros for diesel. “There gas, reaching 1,676 euros per liter, confirms the achievement of the record since 27 October 2014, that is almost 7 years ago, when it soared to 1681 euros per liter, while diesel, reaching 1,523 euros per liter, reached its maximum value from 27 May 2019, when it stood at 1,525 euros per liter “, explains the president of the UNC, Massimiliano Dona. With these price levels, it is the association’s calculation, from the survey of 4 January, a 50-liter tank has increased by 11 euros and 74 cents for the gas and by 10 euros and 22 cents for diesel, with an increase of 16.3% and 15.5% respectively. On an annual basis it is equal to a blow per car equal to 282 euros per year for the gas and 245 euros for diesel. Further knock-on effects are reported by Coldiretti: “In a country like Italy where 85% of commercial transport takes place on the street, the surge in the cost of oil and the consequent increase in fuel prices has an avalanche effect on spending with an increase of transport costs as well as those of production, transformation and conservation along the supply chain, from the field to the table “.
“Unfortunately, the bad news for motorists does not end there – adds Dona – In the general silence the decree of the Ministry of Infrastructure was published last Friday in the Official Gazette which makes the motor vehicle revision rate take off from 45 to 54.95 euros. , almost 10 euros more, with an increase of over 22%. In short, the Government, instead of reducing taxes on fuels, as it did for electricity and gas, has seen fit to give the green light, from 1 November, to the updating of the tariff for the overhaul, further burdening the already harassed motorists “.