Prices on oil and gas have set new records. According to trading data from the London ICE exchange, for the first time since October 2018, prices on oil have exceeded the mark of $80 per barrel, while the price of gas exceeded 1,000 dollars per thousand cubic meters for the first time in history.
The rise in oil prices was caused by a shortage of gas in some regions of the world, in which consumers are switching to cheaper oil. In turn, the cost of October gas futures on the Dutch TTF hub at the time of publication was 85.25 euros per megawatt-hour, or 1031.3 dollars per thousand cubic meters. The rise in price compared to the session on September 27 at the time of its closing amounted to 11.4 percent.
Prices on natural gas have been growing throughout September amid the desire of traders to replenish gas reserves before the winter season. In addition, Russia had to limit gas supplies after an accident at a Gazprom plant in the city of Novy Urengoy.
Meanwhile, power-producing companies already pay $137 per metric ton of coal at exchanges in Rotterdam, Amsterdam and Antwerp. The demand on black coal has been growing against the backdrop of record high prices on natural gas.
Analysts already say that one would have to cancel the program for phasing out coal generation. For example, Drax, a British company that owns one of the last coal-powered electric power plants in the UK, already announced that it was ready to postpone the decommissioning of the power plant for the purpose to ensure the country's energy security.
The state of affairs has been deteriorating due to the lack of gas reserves at storage facilities, the inability to dramatically increase coal supplies from Australia, South Africa and Colombia, and scanty coal supplies from Russia. It is worthy of note that the European Union has been decreasing the consumption of hard coal from 400 million tons to 150 since 1990, and brown coal from 700 to 250 million tons.
Ironically, the reduction in coal consumption has led to a surge in prices on electricity.
For example, Germany, the country that has rich reserves of brown coal in the Ruhr Basin, has reduced its consumption by almost a third over the past four years – from 170 to 120 million tons. Today, however, when gas prices set an all-time high, German electricity operators say that next year the cost of a megawatt-hour will be no less than 100 euros.
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