A worrying trend is occurring as wholesale energy prices are on the rise again. In fact this time the wholesale prices for gas and electricity have reached a 6 year high.
The London stock market has shown an increase of 28% taking it up to $520 per 1000 cubic metres.
The sharp increase in gas prices has been caused by the rapid onset of severe frost throughout Europe. This has resulted in what many believe to be reduced supplies of gas from Russian energy giant Gazprom. As you can imagine the rapid change in weather coupled with an increase in prices has certainly caused some panic.
Not to mention the fact that electricity supply prices in France have actually doubled to around the 140euro per MWh. This is due to an increase in demand which may soon reach its highest ever levels.
Some news agencies have already reported that Gazprom decreased their supply of natural gas to Europe to cover the increased in internal fuel requirements.
Interestingly Russia appears to be somewhat bewildered about all the talk of a decrease in supply; in fact Russia claims that in light of the ongoing frost issues they have actually increased gas supply to Europe.
The big question is who’s telling the truth?