China’s power order indicates a severe gas congestion in Europe

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Natural gas congestion affecting UK, Europe

China’s state-run media quoted Prime Minister Li Keqiang as saying on Thursday that the country would be able to secure its energy supply following a series of blackouts that forced many companies to limit their productivity.

According to Bloomberg, central government officials have ordered state-owned energy companies to wait for any winter supplies, and the directive came directly from Deputy Prime Minister Han Zeng, who oversees the country’s energy sector and industry.

The move by China suggests that other parts of the world will have a much harder time keeping up with the demand for oil.

Natural gas prices in the UK and continental Europe have reached record highs this summer due to a shortage of supplies.

Liquid Natural Gas (LNG) is a major source of competition between Europe and gas flows in Asia, with China experiencing huge power, reliable shipments to disruptive buyers as the highest hit of coal in Asia on Thursday at $ 34.47 per million British units. Generation problems due to shortage.

As the continent tries to attract supplies, the dramatic rise in LNG prices this year has raised UK and European gas prices, but so far buyers in Asia are prepared to pay a premium to lock in freight. That has exacerbated the bidding war between the two regions, which in turn has pushed up prices.

“It shows that gas demand is not very sensitive, even at very high prices,” said a consultant on IHS Markit.

European natural gas prices hit another record on Thursday, reaching a minimum of 97.50 euros per megawatt. In the United Kingdom, daytime prices have risen by more than 25 per cent to a maximum of 2.30 pounds. It traded near 40 degrees Fahrenheit in February.

European gas market challenges have been creating for some time. Extended winter water storage, then LNG this summer. Lack of cargo means that the market is not built to the level required. Russia’s lower pipeline supply and declining GDP have raised fears for the winter.

China’s shortage of coal has allowed European gas traders to increase their natural gas purchases faster than expected.

The rise in gas prices around the world has pushed up energy costs to the top of the political agenda, with fears that the cold winter could squeeze supplies to the level needed by some energy-intensive industries. To limit production.

Recorded gas prices have led to a decline in 10 retailers in the UK and forced the government to intervene to support the country’s largest CO2-based fertilizer company for food packaging and medical treatment. And nuclear power stations.

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China is struggling to increase domestic coal supply as the economy recovers following a series of deadly new security measures.

Coal is trading at Rmb1,700 or $ 263 on Thursday in China’s domestic spot market, according to Agus Media Prices Report. Meanwhile, European prices have risen by more than $ 200 a ton – the last time in 2008.

China’s energy demand has risen by about 15 percent this year, but according to Morgan Stanley, domestic coal supply is only up to 5 percent a year. Coal is still the largest source of electricity in China.

“Chinese gas purchases are taking a toll on coal and heating,” said Colin Hamilton, an analyst at Bimio Capital Markets.

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