European gas and electricity prices have set new records

European gas and electricity prices have risen again to new records, signaling that supply shortages are likely to worsen during the winter season, which begins on Friday. Gas, coal and water supplies for electricity generation are low and there are few signals that the situation could improve in the foreseeable future as demand recovers sharply following the coronavirus pandemic. Russian gas supplies to Germany's Mallnow terminal fell again, erasing Wednesday's partial recovery. Deliveries via this important transit route are about a third lower than they were at the beginning of the week. European power plants that would like to buy more coal from Russia are also disappointed, as their exports are likely to be limited. The extent of the supply reduction has hit the market unprepared at a time when countries are beginning to pump gas from storage. Stocks in Europe are the lowest in more than a decade for this time of year. "We did not expect such awards," Equinor ASA Vice President Alex Grant said at a conference in London. "Prices include a risk premium for what may happen in the future, and this risk is still highly dependent on gas supplies." Another three British energy suppliers ended on Wednesday, bringing the total number of such collapses to 10 in the past two months and a total of about 1.7 million households in United Kingdom will have to replace energy suppliers. The gas contract with next month's supply on the Dutch stock exchange Title Transfer Facility (TTF), the European reference price for gas, rose by up to 6.1 percent to 91.85 euros per megawatt-hour. In Germany, the price jumped 7.4 percent to 126.50 euros megawatt per hour. A contract on the British stock exchange also set a new record.