European natural gas prices rose yesterday, following three days of declines, with the market focused on the risk of supplies from Russia and a major heat wave bearing down on parts of the region.
Dutch front-month futures, the European benchmark, rose 1.4 percent to 159.50 euros per megawatt-hour by 9:14am in Amsterdam.
Gazprom PJSC has declared force majeure on shipments to several European buyers over the past month, people familiar with the matter said.
Photo: EPA-EFE
The move might signal that it intends to keep supplies capped, reinforcing Russia’s grip on the region’s energy.
Last month, Russia slashed its exports to Germany via the major Nord Stream link — the main pipeline to the EU —citing delays to gas-turbine maintenance, following Western sanctions against Moscow. One turbine was flown from Canada to Germany on Sunday and could arrive in Russia in about a week, Russia’s Kommersant newspaper reported on Monday.
Some analysts are skeptical the pipeline will immediately return to normal flows after separate, annual maintenance is completed this week.
Photo: Reuters
“Now that Germany and Canada found an arrangement around the sanctions to bring back the turbine that powers Nord Stream 1 pipeline, it will be interesting to see what other reason Gazprom uses to justify force majeure,” said Leslie Palti-Guzman, chief executive officer of New York-based consultancy Gas Vista LLC.
Meanwhile, extreme heat continues to bear down on western Europe. Temperatures in parts of the UK, including London, were forecast to reach an all-time high yesterday. Paris and Amsterdam were expected to peak at levels just shy of records, forecaster Maxar said.
A halt of Russian gas supplies to the EU could potentially reduce its GDP by as much as 1.5 percent if the next winter is cold and the region fails to take preventive measures to save energy, new estimates by the European Commission show.
The European Commission is set to warn that, in the event of an average winter, a cut-off of gas shipments from Moscow would reduce GDP by between 0.6 percent and 1 percent, a draft EU document seen by Bloomberg News says.
It is also planning a set of recommendations to member states — including reductions to heating and cooling use and some market-based measures — to offset the impact of a possible full disruption by Russia, its biggest source of imports.
That measure would be voluntary, and governments would be told to report back in September with specific steps. The commission would also give itself the right to force consumption cuts if needed later on.
“An EU coordinated response before the winter and in solidarity between member states would limit the negative impact on GDP and jobs of a possible major disruption,” the commission said in the draft document, titled “Save gas for a safe winter.”
Taking early action to reduce demand in the case of an average winter could limit the negative impact of a supply cut-off on GDP to 0.4 percent, it estimates.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
WORLD DOMINATION: TSMC’s lead over second-placed Samsung has grown as the latter faces increased Chinese competition and the end of clients’ product life cycles Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the No. 1 title in the global pure-play wafer foundry business in the third quarter of this year, seeing its market share growing to 64.9 percent to leave South Korea’s Samsung Electronics Co, the No. 2 supplier, further behind, Taipei-based TrendForce Corp (集邦科技) said in a report. TSMC posted US$23.53 billion in sales in the July-September period, up 13.0 percent from a quarter earlier, which boosted its market share to 64.9 percent, up from 62.3 percent in the second quarter, the report issued on Monday last week showed. TSMC benefited from the debut of flagship
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
COLLABORATION: The operations center shows the close partnership between Taiwan and Japan in the field of semiconductors, Minister of Economic Affairs J.W. Kuo said Tokyo Electron Ltd, Asia’s biggest semiconductor equipment supplier, yesterday launched a NT$2 billion (US$61.5 million) operations center in Tainan as it aims to expand capacity and meet growing demand. Its new Taiwan Operations Center is expected to help customers release their products faster, boost production efficiency and shorten equipment repair time in a cost-effective way, the company said. The center is about a five-minute drive from the factories of its major customers such as Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced 3-nanometer and 2-nanometer fabs. The operations center would have about 1,000 employees when it is fully utilized, the company
RSS