The increase in electricity and natural gas consumption accelerated the upward acceleration in prices in the Asian and then European markets.
The benchmark price of liquefied natural gas (LNG) in Asia, Japan/Korea Marker (JKM), had fallen to $1.8 per million BTU (British thermal unit) in the first half of last year, when demand fell due to the epidemic and oversupply.
Towards the end of the year, the demand for natural gas increased rapidly due to the colder weather than expected and the lack of other sources of electricity generation. In this period, due to the delay in the shipment of spot LNG cargoes and the insufficient supply, JKM broke a record by rising to 32.5 dollars per million BTU.
Decreasing to $5 per million BTU this year, JKM rose to $30 per million BTU in November due to the increase in natural gas demand and supply constraints around the world.
NATURAL GAS PRICES CONTINUE TO BREAK RECORD IN EUROPE
In the futures natural gas contracts traded at TTF, the Netherlands-based virtual natural gas trading point with the deepest depth in Europe, prices fell to 3.75 euros per megawatt-hour last year, when demand fell due to the epidemic.
The natural gas price, which was 12 euros per megawatt hour in TTF in September last year, rose to 85 euros on September 27 this year, breaking an all-time record. Thus, the price of natural gas in monthly futures contracts in Europe has increased by more than 600 percent in the last year.
LESS GAS FROM RUSSIA HAS BEEN EFFECTIVE
Despite the increase in demand, less gas came from Russia compared to previous years and the occupancy rates in the continent's underground storage facilities remained below the average of the last 10 years.
In addition, in Europe, where 20 percent of electricity production is met from natural gas, the decrease in hydroelectric power plants due to drought and the decrease in electricity generation from wind energy increased the share of gas in production.
On the other hand, the price of natural gas in October futures contracts at Henry Hub in the USA exceeded $ 6 per million BTU, reaching the highest level in the last 7 years. Thus, the increase in gas prices in Henry Hub in the last year has exceeded 150 percent.
THE COUNTRY WITH THE HIGHEST ELECTRICITY PRICES IN EUROPE
Due to the supply-demand imbalance in the energy sector, the country with the highest increase in electricity prices in Europe was England.
Electricity prices in the UK rose 340 percent this month compared to the same month last year, reaching 221 euros (191 British pounds) per megawatt-hour, according to data from the European-based Nord Pool energy exchange.
The increase in electricity prices in the country has exceeded 80 percent in the last month. Many companies in England that could not meet their costs due to high prices had to stop their activities.
ELECTRICITY PRICE IN GERMANY INCREASED 200 PERCENT
In Germany, the electricity price, which was 43 euros per megawatt hour in September last year, increased by 200 percent to 129 euros this month. During this period, prices increased by 266 percent in Spain, 220 percent in Italy and 185 percent in France.
INCREASING ENERGY PRICES WILL BE REFLECTED TO TURKEY
It is predicted that the rising energy prices in global markets will also have reflections on Turkey. It is estimated that oil, gas, LNG and coal imports, which are priced in dollars and euros in the global market, will create a burden on the economy.
In Turkey, the reference price of 1,000 cubic meters of gas in the spot market within the body of Energy Markets Operation AŞ (EPİAŞ), broke a record this month and rose to 2,320 liras and 3 kurus.
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