Gas prices at record highs as energy crunch worsens; UK’s £1bn Covid bailout criticised – business live | Business

Good morning, and welcome to our rolling protection of the world financial system, the monetary markets, the eurozone and business.

Europe’s gasoline value crunch is tightening, as the winter chilly snap drives up demand and geopolitical tensions between Russia and the West warmth up.

Wholesale gasoline prices for the UK and continental Europe have rocketed to all-time highs, intensifying the squeeze on suppliers and energy customers.

The day-ahead value of UK gasoline hit 457p per therm, up 20% in a day, and round seven occasions increased than the beginning of this 12 months.

UK day-ahead gas prices

The day-ahead value of UK pure gasoline {Photograph}: Refinitiv

The front-month wholesale Dutch gasoline value, the European benchmark, rose greater than 16% to a record excessive of 171.40 euros ($193.46) per megawatt hour on Tuesday, whereas the equal British gasoline contract additionally hit a brand new peak at 4.29 kilos ($5.68) per therm.

These jumps got here after the important thing Yamal-Europe pipeline that brings Russian gasoline to Germany switched to stream east, somewhat than west into Europe — a transfer the Kremlin insisted had no political implications.

Gas prices had already risen in current weeks after Germany suspended the approval course of for Russia’s controversial Nord Stream 2 pipeline. The mission could face US sanctions if Russia have been to invade Ukraine, the place tens of hundreds of Russian troops are near the border.

Kremlin spokesman Dmitry Peskov instructed a convention name on Tuesday,

“There may be completely no connection (to Nord Stream 2), this can be a purely industrial state of affairs.”

James Waddell, head of European gasoline at Energy Points, explains why uncertainty over gasoline imports is an issue:

“Europe has little or no storage buffer this winter and Europe’s stability is subsequently much more depending on imports than in earlier years,”

“Moreover, Gazprom has historically shipped round 20% of its provide to Europe by Poland, however these flows have been inconsistent this 12 months and driving up uncertainty about how a lot gasoline Europe will truly obtain from Russia.”

The temporary shutdown of two French atomic reactors, after faults have been found in pipes in a security system, has additionally pushed up demand for gasoline.

The surge in gasoline prices means UK family payments appear sure to leap sharply subsequent April, when regulator Ofgem’s subsequent overview of the worth cap is available in.

Investec estimates that the cap may very well be lifted from £1,277 per family to round £2,000, that means tens of millions of British households may see their payments surge by greater than 50%, until the federal government takes motion to cushion the blow.

Additionally developing as we speak

Rishi Sunak has been accused of failing to do sufficient to assist embattled hospitality companies by the Omicron wave after refusing to convey again furlough for the hardest-hit companies.

Yesterday’s £1bn bailout package deal of business grants and assist with sick pay has been dismissed as “dud cracker on Christmas Day”, and “too little too late,”. Unions warn that it didn’t present sufficient help for staff; the TUC estimates 238,000 hospitality staff don’t qualify for statutory sick pay.

Michael Kill, the chief govt of the Evening Time Industries Affiliation, stated a stuttering open/shut strategy to authorities restrictions was “crucifying business” throughout a pivotal interval for buying and selling earlier than Christmas.

“Each pound of assist is way wanted. However this package deal is way too little and borders on the insulting.

European markets are set to open a bit increased, after bouncing again from Monday’s selloff yesterday.


European Opening Calls:#FTSE 7307 +0.13%#DAX 15492 +0.29%#CAC 6989 +0.34%#AEX 778 +0.38%#MIB 26713 +0.22%#IBEX 8392 +0.06%#OMX 2326 +0.29%#SMI 12729 +0.36%#STOXX 4189 +0.34%#IGOpeningCall

December 22, 2021

The agenda

  • 7am GMT: UK third-quarter GDP report (remaining estimate)
  • Midday GMT: US weekly mortgage functions
  • 1.30pm GMT: US third-quarter GDP report (remaining estimate)
  • 3pm GMT: US current residence gross sales for November
  • 3.30pm GMT: US weekly crude oil inventories figures

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button