We are firmly in the midst of a global energy crisis. The challenge is most acute in Europe – as the epicentre of global volatility – with benchmark natural gas (TTF) prices continuing to smash new records. Conventional wisdom signals that natural gas prices should be higher in the winter than in the summer, as that’s when demand is highest. However, Ehsan Khoman, Head of Emerging Markets Research (EMEA), believes the current extreme tightness in European gas balances flips that around. Without a recovery in Russian gas flows to Europe, the region’s blackout and heating risks in winter are potentially so extreme that we expect markets (and policymakers) to frontload action to now, i.e. in the summer, to manage the challenges.
This week, Ehsan delves into why storage building to get European targets of 90% full capacity by the end of October will mean less work for prices in the colder winter. Listen now:
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