Who can forget the Great Toilet Paper Shortage of 2020 when panic-buying shoppers stacked baskets sky high with two-ply giant rolls? The same scenario is now at play in Asia. Only this time the demand is for LNG—and this part of the world is in a buying frenzy to secure every possible molecule before winter. With Asia consuming more than half of global supplies, the competition is on for cargoes and Europe has found itself on the short end of the receiving stick. Reese Energy Consulting today is following the energy crisis unfolding in Europe and particularly in the U.K., where wholesale natural gas prices this year have more than tripled yet remain less than the cost of importing LNG when battling for high-priced supplies and adding in the cost of freight. The October gas price at Europe’s Dutch TTF hub traded Tuesday at $86.9 per Mwh. Factor in a global supply shortfall, fewer vessels bound for Europe, waning gas production from the U.K.’s largest single source, limited pipeline imports, and suppliers on the brink of insolvency, and one has all the ingredients for some rough months ahead.
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