Focus today on the meeting of EU energy ministers to discuss an EU-wide solution for a gas price cap. The price cap, however, finds strong opponents in Holland and beyond and the extraordinary meeting of the 27 energy ministers risks turning out to be a total flop from this point of view. According to what has emerged in the last hour, the discussion on the gas price ceiling will be postponed to next month and today only the other measures to combat the expensive energy will be carried out and which on Tuesday 13th will then be translated into legal texts by the European Commission. .
E’ therefore a postponement of the decision on the price cap to October is likely. In particular theWhen it would tend to agree to apply a cap to Russian gas, but opposed to the Italian proposal to apply the cap on the price of gas to all gas imported into Europe. Germany would also be against a generalized cap (lower price would imply an increase in gas consumption), but also to apply it to Russian gas.
As stressed today by the newspaper La Stampa, the fear of countries opposed to the price cap on methane imported via pipeline (the subject of a specific proposal presented by the Italian government) is linked to the fact that this measure could trigger a supply problem precisely when the EU is looking for alternatives to Russian methane. The risk would be that gas sellers could turn their backs on Europe.
Reflections on markets and the utility sector
According to Il Sole 24 Ore, a request to the EU could emerge from today’s meeting to present a document to be negotiated later. “Failure to agree on the gas price cap in the current scenario of high energy prices would keep the uncertainty for utilities – comments Equita today – currently struggling with the management of guarantees to be provided on derivative contracts for the purchase of energy (collaterals), while it remains to be verified how the potential risk of bad credits will be managed (currently not reported by the companies) linked to the expected increase in bill prices (we estimate a cost of the energy bill for the average household in the fourth quarter 2022 equal to about 3 times in 2019) “.
Today the price of TTF gas in Amsterdam marks a drop of more than 4% in the area of 210 euros per megawatt hour.
Meanwhile, storage levels in the euro area have grown rapidly in recent weeks by virtue of the large increase in LNG imports and the prospect of rationing and further initiatives to curb the demand for gas and electricity prices highlights a greater commitment by politicians across the continent to stem the energy crisis. “This is because the goal remains to mitigate the destructive economic impact of the price increase before the peak of the winter demand – argues Ole Hansen, Head of Commodity Strategy for BG SAXO -. However, the fact that i gas and electricity prices are trading around 35% and 52% respectively below the panic peaks seen in the aftermath of the Nord Stream maintenance announcement 1, shows that markets think policy makers are introducing measures to alleviate concerns in Europe ”.