In the energy structure of Europe, new energy power generation accounts for a large proportion, but last year, extreme weather occurred frequently, and wind power and hydropower rushed to the streets one after another, so Europe had to turn to natural gas.
This year, the conflict between Russia and Ukraine broke out, and Europe decided to sanction Russia in order to sanction it.
However, Europe's foreign dependence on natural gas is as high as 90%, nearly half of which comes from Russia. With the sanctions and the recent explosion in Nord Stream, the energy crisis in Europe has intensified.
Rejecting Russian natural gas, Europe began to import a large number of American liquefied natural gas.
The data shows that up to now, the United States has become the world's largest exporter of liquefied natural gas, of which about 60% has flowed to Europe.
This has also led to a continuous increase in natural gas prices in the United States and Europe.
But recently there was a "big accident" in the natural gas market.
While the global supply and demand of natural gas continues to be tight, the price of natural gas in the Permian basin in western Texas in the United States has plummeted by 85% recently. 101On October 24th, the quotation was reduced to 0.2 USD/million British thermal units, and the price was almost zero.
In contrast, the US benchmark natural gas futures contract is still trading around $5.20/million British thermal units.
Then why did the price of natural gas in this part of Texas plummet?
This is mainly related to two things: one is output, and the other is transportation.
Permian basin is an important oil and gas producing area in the United States, and its output has been stable. However, due to the limited transportation capacity of pipelines for a long time, the local natural gas price has been fluctuating greatly.
This price imbalance is related to the maintenance and preventive maintenance of two important local transportation pipelines.
Besides, this is nothing new. In 2020, eight gas prices in this region will be negative, 20 19 years, more than 20 times.
The price of natural gas in Texas plummeted, and recently some natural gas prices in Europe actually fell to negative values, which also surprised the market.
1October 24th 10, the spot transaction price of the Dutch property right transfer facility (TTF) in the European natural gas trading center once fell below-15 Euro /MWh.
TTF is the most important natural gas trading center in Europe, and the futures prices traded in this center have always been regarded as the weather vane of European natural gas prices.
At present, the energy crisis in Europe is escalating. Why did the spot price plummet?
This is mainly because the European gas storage is basically full, there is no extra capacity to accommodate LNG, and it takes a long time to build a new gas storage, which cannot be effectively expanded in a short time.
The gas price in Texas plummeted, and the spot price in Europe also fell to negative value. Does this mean that the crisis of natural gas has eased?
Obviously this view is too optimistic.
The collapse in Texas is a special phenomenon. In sharp contrast to the oversupply in this region, some parts of the United States are facing an extreme shortage of natural gas.
On the other hand, Europe faces more problems.
On the one hand, Europe's gas storage capacity is full, and it can't hold more LNG. On the other hand, the recent warm weather in most parts of Europe has also reduced the consumption of natural gas.
However, weather change is an important factor that cannot be ignored. Just like the extreme high temperature and drought this summer, Europe was caught off guard.
According to the winter weather forecast released earlier in Europe, there may be a cold current in Europe from June to February in 5438, and countries may face greater pressure while trying to cope with the tight supply of natural gas and sky-high energy prices.
With the coming of winter, the demand and digestion speed of natural gas in European market will accelerate.
Especially in the case of Russian gas supply interruption, it is uncertain whether Europe can continue to import large quantities of LNG to replenish its inventory in winter.
Therefore, Europe at this time is far from being able to sit back and relax, and the pattern of tight global energy supply has not been alleviated.