Gas squeeze in Europe causing headaches for German industry
Skyrocketing gas prices in Europe are triggering panic in the market and raising concerns in German industry, Tagesspiegel Background reports. On Wednesday, the spot market price for natural gas briefly surpassed 160 euros per megawatt hour – a 40 percent increase compared to Tuesday. “There has never been anything like it in Europe,” Tagesspiegel Background writes. While some are pointing the finger at Russia for decreasing gas supply to Europe, levels are expected to rise once Russian giant Gazprom refills gas storage facilities in Russia to around 73 billion cubic meters by 1 November, according to analyst Tom Marzec-Manser of London-based consultancy ICIS. He points out, however, that the gas market is "currently characterised by a certain panic" but that political news, such as the European Court of Justice's assessment of the Nord Stream 2 Baltic Sea pipeline, would have a strong impact. An EU judicial opinion on the pipeline issued on Wednesday resulted in a gas price drop. After a two-year delay, Nord Stream 2 has begun filling one of its two pipelines with gas for tests.
Surging prices combined with the already high cost of electricity prices in Europe is creating serious problems for energy-intensive industry. Natural gas provides nearly half of the energy for the chemical and pharmaceutical sector. In agriculture, rising gas prices are making production of ammonia and nitrogen fertilizers economically difficult. Chancellor Angela Merkel, meanwhile, cautioned against blaming Russia for the development. "The question is: Are there any orders that have been placed that are not being supplied by Russia?" That’s not the case, she added.