Weekly European Energy Market Highlights:
- Energy market conditions since Wednesday 8th June have seen multiple technical events that led to a >20% increase in the European gas price.
- Freeport LNG, which accounts for about a fifth of US LNG exports and about 10% of Europe’s imports this year, said on Tuesday that repairs following an explosion at its plant last week could take until the end of the year, with only partial activity set to resume after 90 days.
- Russia’s Gazprom has announced they are reducing the gas flows to Europe via the Nord Stream 1 to 40% capacity only due to needed equipment repairs that had been delayed.
- Although the gas stock levels continued to recover due to the strong LNG deliveries to Europe (the current gas storage level is at 52% but still below the historical average), the sudden reduction in capacity has increased the fear that refill rates to meet winter storage obligations are now insufficient.
- Germany aims to introduce a bill to fulfill 80% of its electricity needs from renewable sources by 2030, with a goal of increasing the capacity of onshore wind power.
- The US has announced new sanctions on Iran in response to their nuclear program, further impacting the supply-side issues.
To read the prior week’s European Energy Market Update, please follow the link here.