Hungry for fuel, China turns to US, Europe considers back-up plans


A coal-fired power station is seen in Baotou city, China’s Inner Mongolia Autonomous Region, October 31, 2010. REUTERS / David Gray

  • Chinese companies in talks with US LNG suppliers – sources
  • Coal prices hit record high in China amid scarcity
  • Poland and Germany take action to support consumers
  • Gas exporter Norway posts record trade surplus
  • EU summit next week to discuss emergency measures

Oct. 15 (Reuters) – China’s energy crisis worsened on Friday, with coal prices hitting record highs as cold weather set in and gas prices soared, prompting major energy companies to seek long-term deals with US suppliers, sources told Reuters.

Energy security has become a top priority for governments in Asia and Europe, as coal shortages and soaring gas prices have triggered blackouts and smothered factories supplying big brands such as Apple, at the time. even where the global economy is waking up from coronavirus restrictions.

To protect consumers from soaring prices as winter approaches, EU leaders should give the green light to emergency measures by member states, including price caps and subsidies, when ‘a summit next week. Read more

China, the world’s largest exporter, has been particularly hard hit and to close the gap, major energy companies such as Sinopec Corp and China National Offshore Oil Company (CNOOC) are in advanced talks on long-term contracts with US exporters of liquefied natural gas (LNG), sources told Reuters.

The talks could lead to tens of billions of dollars in deals that would mark a sharp increase in Chinese LNG imports from the United States at a time when relations between the two countries are still strained. At the height of the Sino-US trade war in 2019, gas trade briefly came to a halt. Read more

“As state-owned enterprises, companies are all under pressure to maintain security of supply and the recent price trend has profoundly changed the image of long-term supplies in the minds of managers,” said one trader. based in Beijing.

A blow to the fight against global warming, China and other countries have turned to coal in the short term. Beijing has also taken a series of measures to contain rising prices, including increasing domestic production of coal and reducing supply to energy-intensive industries.

January’s most active thermal coal futures contract in Zhengzhou CZCc1 hit an all-time high of 1,669.40 yuan ($ 259.42) per tonne on Friday morning, after rising more than 200% since the start of the year. ‘year.

China has assured consumers that the energy supply will be secure for the winter heating season. Read more

OIL CONTINUES TO CLIMB

President Vladimir Putin told Europe this week that Russia, the region’s largest gas supplier, could supply more gas if asked, but some European politicians accuse Moscow of using the fuel crisis as leverage, an accusation that Russia denies.

Oil prices rose again on Friday to trade near their highest level since 2014, at nearly $ 85 a barrel for benchmark Brent crude, as the global gas and coal crisis encourages some consumers to turn to refined products.

Poland’s Climate Minister said on Friday the government would provide consumers with an additional 1.5 billion zlotys ($ 380 million) in subsidies to ease pain as retail prices soar. Read more

Germany has confirmed it is reducing the green energy surcharge on consumer bills to help deal with soaring utility bills. Read more

European wholesale natural gas prices are unlikely to return to “normal” levels before 2023, Dutch bank ABN Amro has warned.

Norway, Europe’s second-largest gas supplier, was among the winners of the energy crisis, reporting a record trade surplus rising 28% to 53.7 billion Norwegian kroner (6.37 billion Norwegian kroner). dollars) last month thanks to surging revenues from gas sales, official data shows.

Reporting by Chen Aizhu, Jessica Jaganathan in Singapore and Scott Disavino in New York, Shivani Singh in Beijing and in the Beijing newsroom; Writing by Elaine Hardcastle: Editing by Carmel Crimmins

Our Standards: Thomson Reuters Trust Principles.


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