Europe weathered the acute shocks of the energy crisis, but more risks lurk. Meanwhile, markets didn’t find OPEC+’s production curbs very convincing, Middle Eastern funds are flocking to Hong Kong, and Russia doesn’t want to take oil payments in rupees. Plus: the role of bots in oil trading.
IS IT OVER YET?
The acute energy shocks are over, but other challenges remain
The acute phase of Europe’s energy crisis is over, says Reuters energy columnist John Kemp: energy inventories are comfortable, and prices are easing back into pre-crisis levels. “Markets have adapted,” he writes, while caveating that there will “undoubtedly be more shocks in future.”
The big question: will Europe be better poised to cushion those shocks more quickly and effectively the next time around?
Germany, for one, is still feeling anxious. The country’s energy crisis is “definitely not finished,” Olaf Scholz warned this week. Of course, the chancellor has an incentive to make the case that the energy crunch still presents a major risk: he’s pointing to the crisis to justify suspending the debt brake.
Meanwhile, the EU this week decided to extend energy emergency measures by a year, citing the need for additional safeguards as global energy markets remain tight.
Then there’s the risk of not an energy supply deficit, but surfeit. In a new report, the International Energy Agency warns that overinvestment in oil and gas could spell commercial ruin for new projects, and also “[lock] in emissions that could push the world over the 1.5C threshold.” Global crises know no borders, and often it’s hard to tell where one ends and where another begins.
Europe’s natural gas storage, percentage full
Source: Gas Infrastructure Europe