On 26th August, EU natural gas prices reached an all-time high of €343 per MWh. This was due to a combination of factors: ongoing problems in the French nuclear sector; the rapid reduction of flows through the Nord Stream pipeline; and an unusually hot summer, which made coal difficult to transport and power plants difficult to cool.
Since then, however, the price has come down considerably; as of this writing, it is less than €140 per MWh. For this we can thank an unusually warm autumn and the filling of gas storage facilities (at which point buying gas became temporarily impractical).
Buoyed by the rapidly falling line on the chart, commentators began to herald the end of Europe’s energy crisis. “Vladimir Putin is now losing the energy war”, declared The Telegraph. “The end of Europe’s energy crisis is in sight”, announced the FT.
Unfortunately, these good tidings now look premature. Natural gas prices have been on the rise again since mid-November. In fact, if you ignore the massive swings in the series, they’ve been rising at a steady clip since Russia first started reducing gas supplies in the middle of last year:
Of course, changes in the price of “Dutch TTF gas futures” are hard for most people to interpret (including myself). A more digestible – and more comprehensive – statistic is the percentage of GDP that we spend on energy. This is shown in the chart below, taken from Bloomberg’s energy man Javier Blas.

As you can see, OECD countries (of which Europe comprises the lion’s share) are forecast to spend 18% of GDP on energy this year, compared to only 10% last year. That’s 8 percentage points of GDP that we could have spent on things like healthcare, infrastructure or tax-cuts. 8% of GDP is four times what we spend on defence.
Putin may be “losing the energy war” insofar as his pipelines have been sabotaged and he’s been forced to sell oil at a discount. But here’s the rub: Europe is losing it too. The winners here are China, the U.S. and Saudi Arabia.
“We should all be skeptical of the emerging narrative that says the worst is over,” says Blas. Likewise, the economist Robin Brooks believes a “deep Euro zone recession is coming”. Both of these pundits are hawkish on Russia, so neither has an incentive to make overly pessimistic forecasts.
I certainly can’t predict the markets; with a relatively mild winter, natural gas prices may start trending down again. But we’re not out of the woods yet – not by a long shot.
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Who is to say it’s all planned? Yes this goes back to the Toby vs Dellers outlook. I’m with James on this one.
High energy prices increase the dependency of the masses on Government. Now behave, or you’ll find yourself cut off from the system, just like in China.
“Who is to say it’s all planned?”
Of course the energy “crisis” is all planned. It is all deliberate. Make the people cold and poor and they will put up with the next round of impositions if they gain some relief. It is cynical and deeply evil.
See Gridwatch for the UK right now:
Total demand: 44.3GW
Wind is contributing 1.25GW
Solar is contributing 0.65GW
So renewables are supplying less than 5% of our need. You could quadruple capacity of renewables and on a day like today they would not even supply a third of current demand. You don’t have to be Albert Einstein to see how this is going to pan out!
Good point.
And just wait until everyone has junked their gas boilers and gas cookers and are using heat pumps (giggle), and charging up their new EV.
Nation’s prosperity is directly proportionate to its energy consumption. As a rule of thumb, the more civilized and developed a society wants to be, the more energy it needs to consume. These deliberate policy decisions (net zero, russia sanctions, etc) can only lead to one outcome – Europe loosing it’s priority place and status in the world.
And that is the plan.
‘… , the more civilized and developed a society wants to be…’
The aim is to reverse that.
Prior to the “intervention” in Ukraine 40% of Europe´s industrial and domestic gas was supplied by the Russian Federation to a population equivalent to 9.78% of the total world population. (USA 6% of the world´s population)
Punishing Russia by sanctioning its gas supplies penalises Europe more than Russia who now markets its energy to the 85% of world population living outside of the “West”- an inviting market mostly without the inconvenience of greenery.
Some short-term inconvenience to Russia while new delivery routes/systems are developed – but for de-industrialising Europe self-inflicted short, medium and long-term problems avoiding the terror of hunger and cold.
Not always wise to instigate difficulties for yourself by trying to punish someone else – but look on the bright side, you may go to a virtue signalers heaven (albeit sooner than planned!)
On the other hand Europe could supply its own gas and get supplies from the USA… Oh…
‘Europe’s Energy Crisis Isn’t Over’
No, it’s going according to plan and will degrade further unless the evil people in charge are stopped.
Due to lack of investment, based on a lack of foresight, the European energy crises is self-made with supplies reliant on Russia´s comparatively cheap, geographically close and almost unlimited natural gas reserves accounting for 45% of all EU gas imports in 2021. By deliberately choking off these supplies Europe is facing the prospect of rolling blackouts, closed factories and a deep recession.
Europe’s energy crisis is a consequence of green politics and climate change insanity which led to EU governments banning fracking, closing coal and nuclear plants and the virtue signaling sanction of Russian gas deliveries. Windmills and solar panels are not enough to power modern economies, especially on cloudy, windless day – if Europe wants gas this means fracking.
Half of Germany’s coal imports, essential to the steel production, manufacturing industries, generating electricity and heating homes came from Russia. Russian gas, oil and coal are embedded in the German economy. While some European governments, primarily the French, have pushed Germany to break its dependence on Russian energy, France´ s reliance on Uranium for its nuclear power stations is cloaked in silence as directly and indirectly Russia holds a significant control over half of the world’s uranium supply.
Fortunately, European gas storage levels have improved and Germany, with the largest storage capacities in the EU, are over 93% full but even as winter supplies look more secure, traders and analysts have warned that, without access to Russian gas, the real test will be re-filling storages next year …
Let’s be realistic.
Putin isn’t a nice bloke. But he certainly isn’t daft, like our own Beloved Leaders.
His role in the European Energy Screw Up is pretty much that of the Big Bad Wolf.
He huffed and he puffed and he blew down the houses of straw and of sticks.
Now, in my book, who is most to blame. The Big Bad Wolf with his big bad breath who keeps on a’doing what a wolf’s gotta do?
Or the moronic little pigs who, despite stark warnings that straw and sticks were useless, kept on a’building, even importing vast quantities of sticks and straw from overseas, and expecting the little pig in his brick house to pay for it all? Whilst criticising what he built for its Carbon Footprint?