EU energy ministers meet as gas prices hit €100/MWh, diesel at records
European Union energy ministers gathered to address an energy price crunch ahead of winter, after natural gas touched 100 euros per MWh on Wednesday and diesel prices reached record highs.
The talks follow comments from EU Energy Commissioner Dan Jorgensen, who said earlier this week that closing numerous refineries across the bloc over the past two decades had been a mistake, as a diesel shortage drives costs to unprecedented levels.
Jorgensen described the current situation as very serious, saying that while a security of supply crisis is not yet evident, it should not be dismissed. Options under discussion reportedly include cutting taxes and grid fees to lower electricity bills, along with loosening technical rules for refineries to encourage higher output.
The bloc is heading into the cold season with gas storage levels around 75%, below the five-year average of over 80%. Liquefied natural gas purchases have also slowed, with volumes for the week ending October 9 down 30% from a year earlier, according to a Rystad Energy analyst.
Rystad’s Mathieu Utting said Europe has less storage cushion than it needs this winter and fewer quick alternatives if supplies are disrupted. He added that mild weather has kept heating demand in check so far, but temperatures alone cannot offset the continent’s underlying vulnerability, a risk tied to supply disruptions from the wars in Ukraine and the Middle East.
Why it matters for markets: Elevated European natural gas and diesel prices feed directly into regional inflation and energy costs, which can weigh on the euro and influence European Central Bank policy expectations. Tighter diesel and gas supply also has knock-on effects for broader energy markets, including Brent crude, as refiners and utilities compete for limited feedstock heading into peak winter demand.
Source: OilPrice.com