RIYADH: It has been a rocky start to the year in the energy sector with gas supply and prices continuing to cause global pain. From Europe to Pakistan, supply remains an issue and governmental policies in countries such as China are amongst the most prominent causes of these problems.
The Big Picture:
·European power costs jumped on Monday as the wind power forecast for the German day ahead showed a 50 percent decrease in supply along with increased demand as temperature drops, Reuters reported.
·European natural gas prices surged by 20 percent on Monday to reach 84.5 euros per megawatt hour as supply flowing in from Russia, via a vital route passing through Ukraine, plunged.
Supply concerns associated with this were further aggravated as projections signalled rising demand for the fuel in Asia, possibly diverting liquified natural gas, or LNG, shipments away from Europe in the process.
·Pakistan’s natural gas scarcity forced local mills to shut for 15 days resulting in the loss of 20 percent of textile exports worth $250 million, Bloomberg reported.
This strikes a further blow to an economy already struggling to keep up with volatile inflation rates and a deteriorating currency.
·Indonesia’s suspension of coal shipments during the month of January may have minimal impact on top consumer China as the country has improved local production to cover for a deficiency in supply of the fuel, according to Bloomberg.
·Chinese stocks dropped with the commencement of the new year as the government decided to dismiss subsidies on new energy automobile procurements from 2023, dragging renewable energy corporations and the CSI 300 index down respectively, Bloomberg reported.
At nearly 1.3 percent down, the CSI 300 index saw its weakest opening session in three years.