Europe is in dire need of natural gas again, with Russian gas supplies flowing in reverse, and after Algeria halted gas shipments to Spain.
Gas prices in Europe rose to their highest level in two weeks yesterday, after they fell by 26 percent, last week, with the start of the flow of Russian gas east from Germany to Poland over the weekend, reversing the usual trend, according to the Bloomberg News Agency.
Spain also obtains less gas now, after the end of the 25-year agreement to transport Algerian gas to Spain via Morocco, without being renewed.
European gas futures have broken records for several days this year, with Russia halting gas destined for Europe and diverting LNG shipments to Asia.
High energy prices sent eurozone inflation in October to a 13-year high, raising fears of a recession.
In turn, Siegfried Rosform, president of the Confederation of German Industries, said he believed Russia had the upper hand in the dispute over the Nord Stream 2 gas pipeline, which will transport Russian gas to Germany via the Baltic Sea.
He explained in press statements yesterday that Moscow may try to link the supply of more gas to Western Europe with the issuance of approval for a license to operate the pipeline, according to “Al Almanya”.
“Such an attempt can be rejected, but this means looking for other suppliers,” he added, noting that many alternative suppliers do not have pipeline connections, and therefore will only be able to offer transportation by ship.
Rosform believes that liquefied gas from the United States is not a real alternative at the present time, as the United States has, in addition, other customers waiting for its gas. “The United States currently has a willing buyer in China, and because of the high Chinese demand, it would be naive to think that LNG from the United States would be cheaper than gas currently purchased from Russia,” he said.
“At a time when demand for gas exceeds supply, suppliers have the greatest influence,” he added.
On the other hand, coal supplies for the next year will continue to decline in Europe, while China has raised production rates, resulting in lower energy prices across the continent.
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