The large increases in international gas prices are due both to increased demand from China and Japan and to other types of geopolitical reasons. Europe’s gas reserves are at their lowest level in ten years.
The EU is desperately looking to cover its gas deficits to be able to meet the increased demand due to the coming winter. The Henry Hub Index is up (4697units, Friday Close, 03 Sep 2021).
The EU’s energy dependence on Russia is growing. The Nord Stream, which connects Russia with Germany, will increase the amount of gas but also the even greater dependence of the EU.
LNG vessels carrying natural gas should be used to the maximum to increase the EU’s gas reserves rapidly. The point, however, is that demand for gas from Japan, China and other Asian countries has also pushed up prices as they are more willing to pay more money.
In addition to,
• The Groningen gas field in the Netherlands begins and decreases.
• Spain is facing a gas cut off from the Maghreb gas pipeline, which connected Algeria with Spain via Morocco. The state-of-the-art gas pipeline (Oran-Almeria) can carry an additional amount of gas but this is not guaranteed.
