General

The energy crisis seems to have swept the world overnight. In the past few days, more than ten provinces in China have curtailed power production and stopped production, which has aroused heated public opinion.

At the same time, the European energy market is not calm. The UK is in a panic. Thousands of gas stations are running out of gas, and citizens are queuing up and rushing! The government has asked the military to stand by... and the price of natural gas in Europe and the United States has gone up! Multiple suppliers "run the road", millions of families are affected! The entire Europe will face the risk of power outages.

Britain's "oil panic" continues! Long queue at gas station

The British Gasoline Retailers Association said on the 27th that there was a serious shortage of fuel in the UK, and thousands of gas stations sold out on the 26th. The Gasoline Retailers Association represents nearly 5,500 independent gas stations in the UK. According to this organization, about two-thirds of the member gas stations reported that the fuel was sold out, and the fuel at other gas stations "partially bottomed out and is about to be sold out."

As more and more gas stations run out of fuel, British taxi drivers feel a headache: Without gas, there is no way to work, and there is no income.

According to a report from CCTV Finance, the 56-year-old Paul is a taxi driver in London and has been in the business for 30 years. He said that this is the first time he has encountered such a serious "fuel shortage".

Paul also revealed that half of the colleagues he contacted frequently stayed at home and did not leave the car because he could not refuel. This also means that their income will be greatly affected.

According to the British Gasoline Retailers Association, thousands of gas stations in the UK were running out of gas on Sunday (26th). Drivers rushed to refuel, triggering panic buying.

On September 26, London-based BP issued a statement stating that most of the 1,200 gas stations in the UK are still in supply and open. However, due to strong demand in the past two days, about 30% of BP gas stations currently have no major grade of fuel.

Joe Perry, a senior analyst at Jiasheng Group, told the 21st Century Business Herald that concerns about the UK's energy crisis are escalating. The rising oil prices have put pressure on gas station costs and prompted drivers to flock to panic buying fuel. At the time of the gas rush at gas stations, the British government claimed that there was no shortage of fuel, but unleaded and diesel-grade gasoline at gas stations had begun to be out of stock.

To make matters worse, meteorologists have stated that the risk of cold weather in the UK this winter is higher than normal, which also means that the British people will face more difficult challenges this winter...

Britain's "oil panic" continues! Long queue at gas station

According to the Global Times, as many as 90% of gas stations in major cities in the UK have announced that they have sold out of fuel.

Worried about not being able to buy fuel, many long queues lined up outside many gas stations, and many British people have to wait for several hours to refuel their cars. Some people tried to jump in the line and squeezed into the gas station following the tanker truck. Many gas stations had to shut down because they could not meet supply demand. In other places, even knife-wielding quarrels occurred.

According to a report by the British Daily Mail on the 28th, a thrilling scene occurred outside a gas station in the Welling district of London on the afternoon of the 27th. A man with a knife quarreled with a car owner while queuing at the gas station. According to the live video, the man with the knife just walked to the front of the car. The owner immediately started the car and pushed the man with the knife on the hood of the car. The man hurriedly evaded and was not injured. In addition, people who were angry because of the line began to beat the gas station security, which eventually turned into a scene of a dozen people fighting on the ground.

Affected by the shortage of fuel supply, many industries in the UK have fallen into the dilemma of "no oil available", even the medical staff of the British National Health Service (NHS) is no exception. The British union warned that if medical staff cannot obtain fuel, patients in the hospital will be severely affected. In addition, children's schooling has also become a big problem. A British father named Adam said that they had to walk home because the car was short of gas, and their children were also unable to go to school because their home was too far away from school and lack of other means of transportation. Adam said: "If you have oil in your car's fuel tank, don't wait in line anymore." Many people have also urged that if everyone can buy fuel as usual, there will be no such problem.

The reason is Brexit and the epidemic?

Regarding the cause of this "fuel shortage", many reports have analyzed that the UK currently lacks truck drivers to transport fuel, and this gap is related to multiple factors such as the new crown epidemic, the aging workforce, and Brexit.

In the eyes of some people, Britain is purely "making it its own way."

Olaf Schultz, the German Finance Minister and candidate for the chancellor of the German Social Democratic Party, said: "The free movement of labor is a characteristic of the European Union. We have tried very hard to persuade the UK not to'Brexit', (but) the other party made the opposite decision. I hope they can handle the ('Brexit') derivative issues."

The British government is unwilling to link the lack of truck drivers and fuel shortage with the impact of "Brexit". It has decided to take a number of emergency measures to alleviate the current crisis. On the 25th, it announced the issuance of 5,000 temporary visas for three months from next month. To recruit foreign truck drivers.

However, this trick may not work. Confederation of British Industry President Ruby McGregor-Smith said that compared to the actual gap, thousands of visas are "drop in the bucket."

Edwin Atma, the investigation and executive director of the FNV, an EU driver’s union based in the Netherlands, told BBC Radio that EU drivers who had been contacted by the union had expressed reluctance “just to help the UK clean up their own mess”. Apply for this short-term UK visa.

However, on the 27th, the British Secretary of the Environment George Eustis stated that Brexit is not the cause of the fuel shortage, and the crux of the problem lies in the new crown epidemic.

British Secretary of the Environment George Eustis explained that the "fuel shortage" was not caused by Brexit. Brexit gave us control over immigration issues. As we announced this week, we can use the short-term visa policy to attract foreign labor. At the same time, I think the main reason for the current situation is the new crown epidemic. Supply chain problems and labor shortages have emerged all over the world.

British government: the army has been dispatched

In the face of the British looting of gasoline, the British Transport Secretary Grant Sharps said that the country has enough fuel, but drivers are in short supply at the moment. The government is already trying to improve the efficiency of road tests for novice drivers and fill the gap for truck drivers, if necessary. , It will also use military power to transport materials and solve current problems.

And on the 27th local time. The British government said it has asked the army to stand by to help resolve the fuel crisis. Military truck drivers will be trained to deploy when necessary. British government officials said that this is a reasonable precautionary measure and the army will be requisitioned if necessary.

The global energy crisis is coming! Natural gas in Europe and the United States is going crazy!

An energy crisis is sweeping the world.

In China, more than ten provinces have experienced electricity curtailment since the end of September. At the same time, the price of coal is setting a record. It has more than doubled from a year ago. The sharp drop in coal inventory has become a problem faced by many power stations. .

In Europe, the price of natural gas futures has hit a record high, and there is a "gas shortage". Europe’s natural gas reserves are 16% below the five-year average and reached a record low in September.

"Since this year, due to the combined effects of supply and demand factors, the wholesale price of natural gas has risen by 250%, and has soared by 70% since August.

The European natural gas trading benchmark, the Dutch TTF center's natural gas price in recent months rose to 76.165 euros (approximately US$89) per MWh

Bottlenecks in Russian supply, insufficient wind power in the North Sea, rising demand in Asia, closure of several platforms in the North Sea, and insufficient natural gas storage are all the reasons for the shortage of natural gas. At this time, Europe is entering the winter, a period when demand for household heating, industry, and power generation surges. Coupled with the reopening of economies after the epidemic, demand has further pushed up. "Fiona Cincotta, a senior analyst at Jiasheng Group, told a reporter from 21st Century Business Herald.

In addition, the price of natural gas in the United States has also risen to a new high in the past 10 years, which has soared about twice as much as six months ago.

As demand continues to recover, crude oil inventories are also shrinking. WTI crude oil prices exceeded US$75 per barrel on the 27th after rising for five consecutive weeks.

The situation in the UK is even more tragic. British Petroleum (BP) said that in the context of panic buying, nearly one-third of the main grade fuels at BP gas stations in the UK have been sold out.

Energy companies are hit hard

Under the impact of the energy crisis, in addition to ordinary people's lives are affected, small energy companies have also suffered a huge impact.

"In 2018, there were about 70 energy suppliers in the UK. Now, that number has dropped to around 40. So far this year, nine suppliers have gone bankrupt, and six have gone bankrupt this month alone. There will be more soon. Many companies closed." Cincotta told a reporter from 21st Century Business Herald.

Despite the soaring energy prices, but subject to the legal maximum price constraints, suppliers cannot pass on the substantial increase in costs to consumers, and many suppliers have filed for bankruptcy. On September 22, local time, British energy suppliers Green Supplier and Avro Energy announced their withdrawal from the market on the same day.

Cincotta explained to reporters, "The increase in energy prices directly impacts small energy companies, which are less likely to manage long-term costs through hedging. Moreover, these companies buy at spot prices and cannot pass price increases on to customers. , So it will suffer huge losses."

In contrast, the situation of large companies is very different from that of small companies. Cincotta told reporters that large companies can get national loan support to take over the client groups of small companies that have closed down. This is good news for large energy companies. By shuffling small companies in the energy market, these large companies will once again achieve good profit performance through the same customer base in the next few years.

Cincotta also told the 21st Century Business Herald reporter that if natural gas prices continue to rise, the current situation may evolve into a full-scale energy crisis, which will have an impact on the British economy and the pound. Increased natural gas imports may widen the UK's trade deficit. According to data from Deutsche Bank, the UK imports more natural gas from Norway than the UK’s domestic production.

Greater risk of "stagflation" is imminent

For the global economy at a critical moment of economic recovery, it is even more critical that rising energy prices have triggered market concerns about economic stagflation.

Goldman Sachs has warned that the energy crisis in Europe may have serious economic consequences: soaring electricity prices will increase the risk of power outages in Europe this winter. Power outages may further push up energy prices, exacerbate concerns about inflation, and make companies costly. The cost of raw materials has been steadily rising.

Similarly, Perry also told the 21st Century Business Herald reporter that the recent energy crisis dynamics will affect consumers and companies, and the latter has been under inflationary pressure brought about by various unfavorable factors.

"High energy prices mean that bills will increase, and inflation will rise accordingly. As potential costs rise, not only households, but businesses, shops and manufacturers will also feel price increases, consumer confidence and economic recovery will Threatened. Rising energy prices may lead to a rapid cooling of economic recovery and expand the risk of stagflation." Cincotta told the 21st Century Business Herald reporter.

Looking ahead, Allianz chief economist Mohamed El-Erian also warned that the supply chain disruption will continue for one to two years, when price increases may return the global economy to the stagflation environment of the 1970s.