Today5 Jul 2022 11:22
Natural gas prices have hit a four month high, adding to inflationary concerns, as Norweigian oil workers go on strike.
Susannah Streeter, senior investment and markets analyst atHargreaves Lansdown, said: ‘’Scorching inflation has provoked a summer of strikes across Europe and now Norwegian oil workers have joined in, and their action is set to exacerbate the pain of rising prices.
"The action by offshore workers on rigs is leading to even tighter supply in the already squeezed energy market. The strikes have hit Equinor’s operations on the Norwegian continental shelf and three fields have been closed. If, as planned, the action escalates by Saturday almost a quarter of Norway’s gas output could be shut down, as well as 14% of its oil production.
"With the screws turning tighter on supplies, natural gas prices in Europe have jumped to the highest level in four months. TTF Futures [in the Netherlands] climbed again to €165, a price last seen in early March soon after the Russian invasion of Ukraine. The reduced flows will be a setback to ambitions by the European Union to ensure nations fill gas storage capacity to a minimum of 80% by the start of November.
"It comes at a highly fragile time geopolitically, given that the EU is facing the threat that Russia will turn off the taps abruptly, potential plunging vital industries into crisis. Germany, so heavily reliant on has imports, is now drafting legislation to enable the government to buy stakes in struggling energy companies that are buckling under the strain of higher wholesale costs."
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