According to Bloomberg News, come this winter and people from across the globe will feel the impact of rising prices of natural gas. It is being anticipated that during the colder months this year, the world will strive to get a share of this crucial item that is very much short in supply but is nevertheless, a vital element for sustenance.
More and more countries have relied upon natural gas to light the oven in their homes or make their homes a warmer place. Not only that even power industries are making all efforts to give up the use of coal and instead make use of energy resources that are cleaner. However, one matter of concern is that there isn’t enough natural gas that can fill up the depleted stocks during the pandemic or help in recovery during the post-pandemic era.
Bloomberg News also reported that nations are trying to outbid each other in getting a greater share of the gas during a time when the suppliers like Russia are preferring to retain the supplies of natural gas at home. But what is concerning is that the supplies will see a dip leading to a crunch during the colder months when temperature slides.
This impending energy crisis in Europe means that the rest of the planet will suffer and might also lead to the shutting down of factories in many other continents and countries. It also means that businesses banking heavily on this form of energy will have to sit up and act.
Inventories at the continent’s storage facilities are at an all-time low level at this time of the year. Pipelines flowing from Norway and Russia are limited. Also, as the weather conditions are calmer, it has affected the output from wind turbines and simultaneously, the continent’s age-old nuclear plants are phasing out or have become increasingly prone to outages necessitating an adequate amount of gas and making it is even more important.
This is one of the reasons why European gas prices skyrocketed by 500% last year and is trading at a record figure.
The spike in prices has made some fertilizer producers in Europe lower their output, according to Bloomberg news. It is being anticipated that more such steps will be taken by the other fertilizer producers as well. This would in turn increase the cost for the farmers that would most likely trigger food inflation on a global scale.
In the United Kingdom, it has already taken a toll as many suppliers are already out of business due to the high energy prices.
The American exporters are almost ready to ship more LNG towards the end of 2021. However, a greater quantity of gas reaching abroad also means that there will be less available at home.
According to Bloomberg News, the gas prices have been comparatively lower in the United States as compared to Asia and Europe but they are still trading at the highest since 2014.
The Department of Energy has been requested by The Industrial Energy Consumers of America to lower US exports till the time the storage levels do not return to normal.