At present, Europe has begun to cool down across the board. The first exercise this winter has arrived, and Germany is the first to bear the brunt of it. The Federal Network Administration, the German energy regulator, warned that German households and companies have used too muc

"Each one's own tricks" to deal with the high air prices! The IEA Director warned: The supply of natural gas in natural gas will be more difficult next year

At present, Europe has begun to cool down across the board. The first exercise in Europe this winter has arrived, and Germany is the first to bear the brunt of it. The Federal Network Administration of Germany's energy regulator warned that due to the drop in temperatures, German households and companies have used too much natural gas in the past week, while industrial users have reduced consumption by 22%.

In order to suppress domestic natural gas prices, Germany launched a natural gas price subsidy program on Thursday, and gave up the gas tax.

In addition, since the European natural gas benchmark price has been impacted by geopolitical and market sentiment and supply and demand factors, the price is too high, EU hopes to formulate a new trading benchmark for liquefied natural gas (LNG). If Russian natural gas is completely replaced, will need to import 200 million tons in the next ten years. An EU official said European Commission has begun setting new benchmarks with the Energy Regulatory Authority (ACER).

The cold winter has not yet arrived yet, and Europe is already like an "ant on a hot pan", but the challenges facing Europe are not just that. Fatih Birol, the director of the International Energy Agency (IEA), said on Thursday that the market for liquefied natural gas (LNG) in in 2023 may be more tense than this year, because after the Asian economy recovers, demand for energy will come back. Recently, the Nord Stream pipeline was "deliberately" destroyed, which will make the energy market extremely tense. Perhaps in the near future, Europe will usher in a "hell mode".

Germany's natural gas consumes too quickly, smashing 200000 million euros to deal with rising energy prices

German energy regulator Federal Network Administration warned that German households and companies have used too much gas in the past week due to the drop in temperatures and said they need to save at least 20% of fuel to avoid fuel shortages this winter.

The German Federal Ministry of Energy said on Thursday that natural gas consumption was much higher than the average, up 14.5% from the 2018-2021 average. The agency's president said:

"If there is no large reserve, it will be difficult for the private sector to avoid natural gas shortages this winter."

Private consumers and small businesses account for about 40% of Germany's natural gas consumption, and fuel is mainly used for heating. The network agency said the remaining 60% of industrial users reduced their consumption by 22% in August, and their use was "significantly below average" last week.

on Thursday Germany launched a natural gas price subsidy program for up to 200 billion euros , called "Shield of Defense". The plan introduces an urgent restriction on gas prices for residents and enterprises by borrowing money, and the difference between the price limit and the price of natural gas purchased in the market is paid by the German government. To this end, the German government restarted the economic stability fund established during the epidemic and authorized it to borrow up to 200 billion euros from the market.

In addition, the German government has also abandoned the plan to impose a natural gas tax to avoid stimulating prices to rise further, but it still plans to impose a huge profit tax on energy companies . Finance Minister Finance Minister Lindner said that Germany will not follow the UK's expansionary fiscal policy toward , and the purpose of the 200 billion euros is to gain time to get renewable energy online and put into operation.

German asset management company DWS said that German inflation has not peaked yet , and it is not ruled out that it soared to more than 12% in winter. This has increased the pressure on the ECB to raise interest rates by 475 basis points again at its October meeting.

EU wants to establish a new natural gas trading benchmark

EU wants to develop a new trading benchmark for liquefied natural gas (LNG) because it believes that the decline in Russian pipeline natural gas flows and record LNG imports have caused the current pricing mechanism imbalance.

The European Commission issued a document on Thursday saying that market participants can voluntarily use alternative LNG price benchmarks, which should be based on verifiable LNG freight prices to ensure that it reflects the true price of fuel.

LNG buyers' current pricing benchmarks are mainly HenryHub in the United States or Japan-Korea benchmarks in Asia (JKM), followed by a small spread to cover regasification and transportation costs. In Europe, the standard benchmark is the Dutch Ownership Transfer Facility (TTF), and the UK's National Balance Point (NBP).

However, TTF prices have been impacted by geopolitical and market sentiment and supply and demand factors. Some industry sources believe it is no longer certain of the actual value of European LNG, especially as imports in the region increase this year.

Analysts estimate that as governments rush to find alternatives to Russian natural gas, Europe's LNG imports will hit a record high this year. If Russian natural gas is completely replaced, will need to import 200 million tons in the next decade.

Although LNG is generally higher than natural gas, the infrastructure limitations of pipeline networks and the ability to receive and process frozen fuels have led to a reversal of the relationship between some European hubs, resulting in significant price differences. For example, natural gas prices in France are lower than other hubs such as Germany that currently have no LNG receiving stations.

An EU official said the European Commission has begun to develop new benchmarks with the Energy Regulatory Authority (ACER). However, some market participants remain skeptical. Hansvan Cleef, senior energy economist at the Bank of Netherlands, said:

" So far, TTF remains the most LNG in Europe and is therefore the most representative. If you filter LNG from the TTF market, liquidity will decline, which may lead to greater price fluctuations." Anise Ganbold, senior analyst at

AuroraEnergy Research, said that reducing gas prices by abandoning or reforming TTFs may have unexpected consequences, thereby reducing the motivation to increase gas supply or reduce consumption.

Meanwhile, an independent commodity intelligence service (ICIS), which has been analyzing and pricing the European gas market for decades, said there was doubt that the new standard would be widely accepted.

" Only a few manufacturers, utilities and trading companies are actively buying and selling spot LNG to Europe... In a market with insufficient liquidity, it is more difficult to set prices that market participants can accept.

IEA Director Warned: Natural gas supply will be more difficult next year

IEA Director Warned: Natural gas supply will be more difficult next year