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The inability of traders to obtain new gas in Europe will infuriate British politicians and give further ammunition to the European commission which last week called for faster deregulation of continental markets. A lack of transparency means it has been hard to discover exactly where the bottlenecks are and why suppliers on the continent are not switching gas to Britain. Yesterday the spot price of gas in the Netherlands had reached 70p per therm [vs 250p/th in the UK ]. But the Interconnector pipeline to Britain was handling only 8m cubic metres, when it could handle 16m.
Now, if the UK really wanted to pay 250p/th directly to Russia, is there any way the UK and Russia could ensure that the gas gets to them and the Netherlands can't "siphon it off" (like Russia accused Ukraine of doing?). How does the continental gas grid work?
Finance is the brain [tumour] of the economy
I don't think that gas markets are as volatile as electricity but it must not be a pretty sight.
I think we're about to find out...
To be fair, it's probably easier to turn demand for gas off than it is for electricity, as industrial use is a higher fraction, and I suspect most of it is a lot more price sensitive than electricity users (except very specific cases like Aluminium producers who do not rely on the spot market anyway), so I expect gas demand to be cut ot lower prices, thus limiting volatility to some extent.
But if you have long term shortages, then it's another can of worms. A late cold snap might be vicious.
In the long run, we're all dead. John Maynard Keynes
If the industrials have hedged, they don't suffer any short term pain. Now you have to stimulate them to buy out of their sales contracts to free up the gas. That sounds straightforward but people are lazy and would prefer not to upset well laid plans.
Energy markets have been running around for a decade selling these folks price hedges...
In June , the cost of a megawatt hour increased more than fivefold, going from the 1999 level of $30.53 to $170.60. In October , prices doubled over the same period a year earlier, going from $53.47 to $111.04. And in December  -- despite a 1.46 percent decline in electricity usage from the previous December  -- peak wholesale electricity prices hit $425.59. They'd been $31.88 one year before.
market transparency and liquidity becomes essential, and anti-competitive behavior by traders or others must be fought. But that's pretty hard to do against determined cheaters;
PUC regulation is like democracy... The worst possible system except for all the rest.
I note already the trend to blame higher prices not on market liberalisation (which, somehow, in the energy sector, is deemed not to produce more transparent prices, but only lower prices) but on the nasty continental ('nationalist', 'protectionist', 'rigid') Europeans who refuse to share their cheap gas.
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