Electricity prices have reached a record high in

Electricity prices have reached a record high in

European electricity prices have reached a record high after Russia cut its gas supply to Europe. Because of this, Germany has already entered the second stage of its contingency plan. At the same time, the price of oil also increased considerably on Monday.

The main cause of the increase in electricity prices is due to the conditions in which the cuts made by Russia in the supply of natural gas spread to the energy networks and threaten to cause lasting damage to industry and households.

Germany’s basic electricity reached its highest level in history on Monday and surpassed the previous record set in December, after rising by 13%, reaching trades at 325 euros per megawatt / hour. The equivalent contract in France has doubled since the beginning of the year, reaching 366 euros per MWh.

Gas prices have reached a record high

Energy prices are strongly influenced by the cost of gas, which is used to generate electricity. In Europe, gas prices have risen to their highest level in four months after Moscow reduced its gas supply to Europe.

The situation is also exacerbated by the maintenance problems of a large number of nuclear power plants in France. Neighboring countries are consuming additional gas to generate electricity for France, at a time when the continent is also trying to maintain its winter reserves, fearing further cuts in Russian exports.

“It’s not a situation that no one in Germany had on schedule even a year ago,” said Hanns Koenig, head of projects commissioned at Aurora Energy, a research firm.

Germany has entered the second stage of the contingency plan

In this regard, last month, Berlin implemented the second phase of its three-tiered contingency plan. The third level would require the rationalization of gas for industrial users and households. A local government official in Hamburg warned late last week that hot water could need to be streamlined in the winter if the gas shortage continues.

In addition, European zinc and aluminum plants are under significant pressure due to rising energy costs and falling prices. Chris Heron, director of public affairs at Eurometaux, the European metals association, said the sector had been “on its knees” since September last year and that “closing new plants is a real concern if energy prices remain so high,” Financial said. Times.

Oil prices rose by more than 2%

At the same time, the price of oil rose on Monday, as supply concerns caused by declining OPEC production, unrest in Libya and sanctions against Russia outweighed fears of a global recession affecting demand.

Eurozone inflation hit another record high in June, bolstering arguments in favor of rapid increases in European Central Bank interest rates, while US consumer sentiment hit a record low.

Specifically, Brent crude oil rose $ 2.26, or 2%, to $ 113.89 a barrel by 16:48 GMT (19:48 Romanian time), after falling more than $ 1 in the first trades. US West Texas Intermediate (WTI) crude rose $ 2.20, or 2%, to $ 110.63, a low volume during the US Independence Day holiday.

Libya has declared a state of force majeure

The Organization of the Petroleum Exporting Countries (OPEC) missed the target of increasing production in June, according to a Reuters poll.

In Libya, an OPEC member, authorities on Thursday declared force majeure in the ports of Es Sidr and Ras Lanuf, as well as at the El Feel oil field, stating that oil production fell by 865,000 barrels per day (bpd).

Meanwhile, Ecuador’s production has been affected by more than two weeks of unrest that has caused the country to lose nearly 2 million barrels of production, state oil company Petroecuador said.

British Prime Minister Boris Johnson on Monday called on the OPEC + producer group to produce more oil to deal with a cost-of-living crisis.

Comparably, Brent crude oil was close this year to surpassing the 2008 record of $ 147 a barrel after Russia’s invasion of Ukraine raised supply concerns.

Rising energy prices amid bans on Russian oil and a reduction in gas supply have pushed inflation to its highest level in decades in some countries and fueled fears of a recession, Reuters reports.