An uproar in gas markets..Europe and the UK are paying the...

An international report confirmed that there is a huge uproar in the gas market that it has not seen for several years, as within one year the gas market moved from expecting an abundance of cheap supplies to worrying about the possibility of a severe shortage in the event of a cold winter coming this year.
The “Oil Price” report stated that this new reality was expected to some extent due to the presence of several main factors, including the lack of drilling activities, the lack of investments in new sources of supply, the intensification of capital control efforts by producers, as well as the shift towards the allocation of capital to projects renewable energy resources.
The report said, “Oil and gas prices are currently recording a higher level than any previous expectations, but we are witnessing the continuation of gas to outperform oil in its prices, which have tripled on an annual basis.”
The report pointed to the entry of some additional factors into the equation that contributed to the strengthening of the new state of scarcity and the exacerbation of the situation in the market as a whole, indicating that Europe and the United Kingdom are already paying the price of a hasty “greening” of energy.
The report stated that the “greening” of energy supplies around the world, especially in Europe, has supported much of the current global environmental momentum, which has culminated in focusing on carbon dioxide emissions, considering it a harmful gas, which led European countries to turn to wind and solar energy to generate electricity in pursuit of Behind the Paris goals and zero carbon emissions by 2050.
The report pointed to information confirming the cessation of wind production during the summer months, which created additional demand for the already meager gas supplies.
He pointed to the precarious state of energy markets in Europe with the approach of the long European winter, saying that the electricity price shock was most severe in the United Kingdom, which has turned to wind farms to eliminate net carbon emissions by 2050.
The report pointed out that the Europeans have limited gas production by imposing carbon taxes for years, which has burdened producers and contributed to reducing supplies widely.
The report stated that the low quantities from a major source of natural gas supplies in Europe with the early closure of the Dutch gas giant “Groningen” contributed to the European Union’s arrival to the current crisis of high prices and demand outweighing supply significantly.
The report indicated that the reduction in supplies from “Groningen” began in 2014, and then was reduced more and sharply in 2019.
In a related context, a report by Rystad Energy highlighted the bottlenecks in the European gas market due to production cuts from Groningen, indicating that the sharp decline in the company’s production will reshape the European energy landscape.
The report pointed out that the field achieved a production recovery at the beginning of this century, reaching 57 billion cubic meters in 2013 and continuing for decades until it became the central gear in the gas system in Northwest Europe.
The report stated that the phasing out of this giant field will force Europe to expand its gas imports at a faster pace, noting that this radical transformation that is taking place in the Netherlands can already be pursued, as new energy policies in this pivotal country have caused the transformation from being a net exporter of gas. to a net importer.
He explained that the contractions of drilling activities and the contraction of new supplies led to a change in the European and then international gas map, pointing to the shift in capital allocations by producers as a result, which led Europe to the current situation, which is suffering in order to maintain the provision of electricity and heating to consumers.
The report stated that gas still occupies a prominent place in the American energy mix, as shipments of liquefied natural gas from the shores of the United States to Europe were operating at an all-time high recently.
The report warned that starting in 2020, Asia began bidding on European buyers of US supplies of LNG.
The report promised that the Russians are coming to the rescue, at least at the current stage, as the European Union relies on Russian gas to keep meeting electricity needs to a large extent stable.
He explained that Asia is still a center of demand for liquefied natural gas, especially from China, which has moved away from coal, pointing to the market’s concern that stocks are low before winter at the global level.
The report pointed out that the market is looking forward to Germany’s final position on the Russian Nord Stream 2 pipeline, especially in light of the low stocks, which worries everyone, especially in light of Asia’s devouring of American supplies, which adds more burdens on Britain and the European Union.
The report warned of the repercussions of rising gas on agriculture and foodstuffs, adding, “Last week, two fertilizer factories in Britain closed due to high gas prices, and fertilizer prices received a heavy blow, and food prices could rise sharply, as well as cold expectations for the winter season in Europe, which means a worrying situation in the European Union and Britain for the next six to nine months.”
The weekly gas inventory report from the US Energy Information Administration (EIA) highlighted some modest improvement, but reveals that the market is still about 8 percent below the five-year average as it approaches the wide winter consumption season.
The report stated that the energy crisis in Europe is driving up natural gas prices around the world as the European Union is increasingly dependent on supplies from the United States and Russia.