Severe than expected! Frontline traders tell the 'truth': European winter will be very, very difficult this year

time:2022-12-09 18:27:27source:chakarski.com author:Stock market
Severe than expected! Frontline traders tell the 'truth': European winter will be very, very difficult this year

Although electricity prices in Europe have more than doubled, this winter's energy outlook is more dire than many expected. In a recent article by media columnist Javier Blas, he presented a conversation that paints a chilling picture of the energy landscape and that Europe's electricity supply situation is much more difficult than European governments admit. The conversation stemmed from a conference call between energy traders and the management of UK electricity network operator National Grid, which takes place on a weekly basis and where traders ask questions about electricity market conditions, giving the market a glimpse Opportunities that are on the minds of the frontline workers. The following is a series of questions raised by power traders in last week's conference call: 1, "Under the pressure of countries to emphasize supply guarantees, if cross-border energy transactions collapse this winter, have you deduced possible scenarios and Is there a corresponding plan?" 2, "Can we have a meeting to discuss the emergency arrangements?" 3, Another participant said that from the forecast of the balance of electricity supply and demand, it can be seen that anyone who knows a little elementary school mathematics can Knowing how bad this winter will be; 4, and one trader scoffs at the UK grid forecast, "Do you believe what you write? I don't think you believe it, and neither do anyone else." Recently, UK forwards Electricity prices have skyrocketed, from £242/MWh in June to £1,000/MWh, while the UK government has sharply raised the cap on energy bills. The UK Energy Regulatory Authority (Ofgem) said it will raise the maximum amount a household can pay for general energy use, known as a price cap, by 80% from October 1 due to soaring gas and electricity prices. That said, the annual cost of gas and electricity for the average British household will rise from the current £1,971 to £3,549, triple the level of last winter. Ofgem said earlier this month that energy price caps would be updated quarterly in the future, rather than every six months as before, and the crisis is expected to worsen by January next year. Probably more than £5000. According to Wall Street News, the increase in the price cap is likely to force millions of people into the predicament of no money to buy fuel, and these people will have to choose between heating and food. The latest increase in the energy cap will mean the poorest households spend 25% of their income on energy alone, and by April 2024, about 6 million (almost a quarter of households) will run out of savings. In Javier Blas' view, the call will increasingly use terms such as "emergency" and "shortage," with attendees focusing on when, not if, a crisis will strike. The British government, by contrast, is quite optimistic, insisting there is nothing to worry about. The UK government even stated earlier this week that “households, businesses and industry can be confident that they will get the electricity and gas they need during the winter. This is because we have one of the most reliable and diverse energy systems in the world. One of the biggest worries right now, in the eyes of traders, is what will happen if European countries adopt a beggar-thy-neighbor policy and shut down cross-border power supplies once they encounter systemic stress? Norway is already considering this. a practice. Also, if households and businesses can't afford the high costs of electricity and gas, how this can erode weak consumption. During this call, a trader asked, "How disruptive do you expect the energy price shock to be on industrial and commercial consumption?" Javier Blas concluded that from the current indications, three can be drawn Conclusion: First, the looming power shortage is worse than many industry executives publicly admit, and far worse than the government admits. Second, high oil prices are a big problem, and supply security is also at risk. Third, time is running out (for policymakers) to prepare before temperatures start to drop. This article does not constitute personal investment advice and does not take into account the particular investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, views or conclusions contained herein are appropriate to their particular circumstances. There are risks in the market, investment needs to be cautious, please make independent judgments and decisions. Time is running out for policymakers to prepare
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