Published
The Group of Seven “advanced” nations (G7) have been debating whether to place a price cap on Russian energy exports. Russia has earned record high profits from exported energy due to the sharp rise in natural gas and crude oil prices, which the G7 fears are allowing them to continue the war in Ukraine. The price cap has primarily been focused on crude oil, which would be tied to financial services, insurance and the shipping of oil cargoes, with the shipper committed to selling the Russian crude at a set maximum price. Opposition to the plan has stemmed from fears that this could lead to further supply disruptions, with Russia only likely to part with crude and Liquefied Natural Gas (LNG) cargoes, and pipeline gas, at the market price; a price shippers may not be able to profit from.
France's CGT Trade Union, which represents many workers in the energy sector, is planning to blockade gas storage facilities and Liquefied Natural Gas (LNG) terminals this week. This is likely to provide upward pressure to European energy prices, with the capacity for imports into the EU reduced, whilst storage facilities could see a period of flow injections. Lower injections due to the blockades would likely exacerbate upward pressure to Winter 2022 contracts, with storage injection rates slowed. This comes on the back of reduced gas flows to Europe through the NordStream1 pipeline, which has seen gas flows from Germany to France largely halted. The result could be a tightening of French, and by extension European gas and power markets.
Dukefield Energy understand that this is a very hard time for customers looking at their energy contracts in the next six months. In the media that are several news stories being reported which are factors that have an impact on the market. This doesn’t look to be settling down for some time. Our advice is that anyone with contracts up for renewal this year is to contact us to so we can look at all options and plan the right strategy for your organisation. Do not leave this to the last minute as it will limit the options available.
We have multiple suppliers offering a variety of products to help manage the risk of high prices and a volatile market. If anyone has any concerns or just wants some advice, please don’t hesitate to Dukefield Energy.
Tel: 03454022461
Email: [email protected]