Gas prices fall from record levels amid energy crisis; Britain’s £1 billion Covid rescue plan criticized – Business Live | Business

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Good morning, and welcome to our renewed coverage of the global economy, financial markets, the eurozone, and business.

The gas price crisis in Europe is abating, as the winter cold has increased demand and heightened geopolitical tensions between Russia and the West.

Wholesale gas prices in the UK and Europe have risen to all-time highs, putting more pressure on suppliers and energy users.

The UK price of gas the previous day was 457p per heat on Tuesday, up 20% on the day and about seven times higher than at the start of this year.

Previous UK natural gas price Photo: Refinitiv

The front month Dutch wholesale gas price, the European benchmark, rose more than 16% to a record 171.40 euros ($193.46) per megawatt-hour on Tuesday, while the British gas equivalent contract also hit a new peak at 4.29 pounds ($5.68). ) for each temperature.

The leaps came after the main Yamal-Europe pipeline that brings Russian gas to Germany turned east, not westward into Europe – a move the Kremlin insisted had no political implications.

Gas prices had already risen in recent weeks after Germany suspended the approval process for Russia’s controversial Nord Stream 2 pipeline. The project could face US sanctions if Russia invades Ukraine, where tens of thousands of Russian troops are located near the border.

Kremlin spokesman Dmitry Peskov said in a conference call on Tuesday,

“There is absolutely no connection (to Nord Stream 2), this is a purely commercial situation.”

James Wadell, Head of European Gas at Energy Aspects, explains why uncertainty over gas imports is a problem:

“Europe has very little buffer this winter, so Europe’s stock is much more dependent on imports than in previous years,”

In addition, Gazprom has traditionally shipped about 20% of its supplies to Europe via Poland, but these flows have been inconsistent this year and heightened uncertainty about how much gas Europe will actually get from Russia.

The temporary shutdown of two French nuclear reactors, after tube defects were discovered in a safety system, also increased the demand for gas.

The surge in gas prices means that UK house bills will jump sharply next April, when the regulator’s next review of the price ceiling comes in.

Investec estimates the cap could be raised from £1,277 per household to around £2,000, meaning millions of British households could see their bills rise by more than 50%, unless the government takes action to cushion the blow.

As the day comes

Rishi Sunak has been accused of failing to do enough to help hospitality companies beleaguered by the Omicron wave after refusing to return leave to the hardest hit companies.

Yesterday’s £1 billion rescue package of business grants and sick pay aid was dismissed as a “useless Christmas Day cracker”, and “a little too late”. Unions warn they are not providing adequate support to workers; TUC estimates that 238,000 hospitality workers are ineligible for statutory sick pay.

Michael Keel, chief executive of the Night Time Industries Association, said the intermittent open/close approach to government restrictions was “the heart of business” during a pivotal period of pre-Christmas trading.

“Every pound of help is badly needed. But this package is too little and off the mark.

European markets are set to open slightly higher after rebounding from Monday’s selling yesterday.

IGSquawk (IGSquawk)

European opening calls: #FTSE 7307 + 0.13% # DAX 15492 + 0.29% # CAC 6989 + 0.34% # AEX 778 + 0.38% # MIB 26713 + 0.22% # IBEX 8392 + 0.06% # OMX 2326 + 0.29% # SMI 12729 + 0.36% #STOXX 4189 + 0.34% #IGOpeningCall

Dec 22, 2021 Agenda 7am GMT: UK Q3 GDP report (final estimate) noon GMT: Weekly US Mortgage Applications 1.30pm GMT: US Q3 GDP report (final estimate) ) 3pm GMT: Existing US Home Sales for November 3.30 GMT: Weekly numbers for US crude oil inventories.

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