China looks to the U.S., Europe eyes relief plans as energy crisis deepens

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China’s energy crisis hit a record high on Friday as coal prices hit a record high on Friday, as cold weather plunged and rising gas prices forced major energy companies to strike long-term deals with US suppliers, sources told Reuters. inspired to.

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Energy security has shot to the top of government agendas in Asia and Europe as looming coal and rocketing gas prices have triggered power outages and shut down factories supplying big-name brands like Apple. , as the global economy reawakens from coronavirus restrictions.

To protect consumers from rising prices as winter approaches, EU leaders are set to green light emergency measures by member states, including price caps and subsidies, at a summit next week.

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China, the world’s top exporter, has been particularly hard hit and major energy companies such as Sinopec Corp and China National Offshore Oil Company (CNOOC) are in advanced talks about long-term contracts with US exporters of liquefied natural gas (LNG). Huh. told Reuters.

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The discussions could lead to billions of dollars in deals that would increase China’s LNG imports from the United States in the coming years. In contrast, at the height of Sino-US trade tensions in 2019, gas trade between the two countries stalled for some time.

“As state-owned enterprises, companies are under pressure to maintain the security of supply and the recent price trend has deeply changed the image of long-term supply in the minds of the leadership,” said a Beijing-based businessman.

China and other countries have turned to coal in the short term in the fight against global warming. Beijing has taken several measures to contain the price rise, including increasing domestic coal production and cutting supplies to power-hungry industries.

The most active January Zhengzhou thermal coal futures contract CZCc1 hit a record high of 1,669.40 yuan ($259.42) per tonne early Friday, rising more than 200 percent so far.

China has assured consumers that the energy supply will be ensured for the warm winter season.

oil keeps rising

President Vladimir Putin told Europe this week that Russia, the region’s biggest gas supplier, could provide more gas if told, to help cushion the rise in prices, given Europe’s reluctance to work on long-term contracts. Responsible for signing.

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Some European politicians have said Russia is using the hike in gas prices to take advantage of the kick-start flow through the Gazprom-backed Nord Stream 2 pipeline project, which bypasses Ukraine – an allegation Russia denies. does.

Ukraine’s state-run gas transit operator said on Friday that the amount of Russian gas pumped into Europe through Ukraine has fallen short of their current transit contract.

“This behavior of Gazprom deserves special attention from Europe, because despite the significant shortage of gas in the EU and the maximum prices, Gazprom does not even use the capacity for which it has already been paid,” said the operator’s head. Sergei Makogon said, referring to Russia’s state gas exporter.

Gazprom did not immediately respond to a request for comment.

Oil prices hit a three-year high on Friday, climbing above $85 a barrel on forecasts of a supply deficit in the next few months, as rocketing gas and coal prices switched to oil products.

Poland’s climate minister said on Friday that the government would provide an additional 1.5 billion zloty ($380 million) in subsidies to ease consumer pain caused by rising retail prices.

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Germany also confirmed that it is slashing green energy surcharges on consumers’ bills to help with rising utility bills.

Dutch bank ABN AMRO has warned that European wholesale natural gas prices are unlikely to return to “normal” levels before 2023.

Norway, Europe’s second-largest gas supplier, has been among the winners of the energy crisis, reporting a record trade surplus of 53.7 billion Norwegian crowns ($6.37 billion), up 28 percent last month, official data showed. That the sale of gas has increased revenue. .

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