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With declining reserves and increasing demand, coupled with the approaching winter and insufficient transportation capacity, the UK is on the verge of an energy crisis.

The UK's energy supply crisis is not an exception. Natural gas supplies in the United States and some Asian countries are also tight, and global natural gas prices continue to soar as a result.

In this context, the cost of imported LNG in my country has also risen. Industry insiders suggest that companies need to make good reserves of natural gas before winter, and if necessary, adopt hierarchical measures such as "suppressing non-residents" to ensure supply.

Britain’s winter is a bit "cold"

For the British, this winter may be particularly difficult, as the energy supply crisis is hitting all walks of life.

Due to the foreboding of the shortage of energy supply, there were long fleets outside the gas stations in the UK throughout the weekend. Drivers were vying for fuel spots, and the goods in the gas stations were also looted.

Behind people's panic buying is the insufficient supply caused by the obstruction of the supply chain. Due to the serious shortage of truck drivers, some companies have no choice but to announce the suspension of supply.

BP issued a statement on the 24th that some of its gas stations in the UK were temporarily closed due to insufficient fuel supply, and it is currently working hard to restore supply. Some of the larger gasoline retailers report that 50% to 90% of their pumps in British cities are drying up.

The soaring price of natural gas has exacerbated the energy crisis. The price of natural gas at the TTF Center in the Netherlands, the benchmark for European natural gas trading, rose to 76.165 euros (approximately $89) per MWh in recent months, which is another record high following a week ago. Since the beginning of this year, the contract price has risen by more than 250%, and it has risen by nearly 70% since August alone.

Natural gas is vital to Britain's energy supply. According to the British government, more than 22 million households in the UK use natural gas. In 2020, 38% of the natural gas demand in the UK will be used for domestic heating, 29% will be used for power generation, and 11% will be used for industrial and commercial purposes.

Taking into account the social problems that may be caused by the increase in natural gas prices, the British government stated that it will set a ceiling on energy prices to reduce the impact of sudden increases in global natural gas prices on household consumers. In addition, the country will also provide a 150 pounds energy consumption discount for eligible families in winter to help low-income families tide over the difficulties.

It's not just the UK, the energy crisis is spreading in Europe. Spain’s electricity prices have tripled since December last year. The government announced an energy price limit plan and promised to reduce residents’ energy expenditure to 2018 levels. In addition, the French government promised to provide 5.8 million low-income households with a 100-euro energy subsidy.

In addition to Europe, the U.S. Industrial Energy Consumers Association requires the Department of Energy to restrict the export of liquefied natural gas to avoid price increases and shortages of natural gas in the winter.

"As European natural gas inventories are far below normal levels, the cold winter may push natural gas prices to record highs." Kim Fustier, an analyst at the investment giant HSBC Bank, warned that natural gas prices will remain at this winter. An unusually high level, and will continue until next summer.

High natural gas prices will be further transmitted downstream

An executive of an A-share gas listed company told the Shanghai Securities News that due to the epidemic, global natural gas extraction in 2020 will decline. However, since the beginning of this year, as the global economy continues to recover, energy demand rises rapidly, and natural gas supply-side reserves are insufficient, the price of natural gas rises globally, which will be further transmitted to the downstream and increase the operating costs of enterprises.

Guanghui Energy told reporters of Shanghai Securities News that with the implementation of environmental protection and emission reduction policies, the consumption ratio of natural gas instead of coal energy is gradually increasing. At this point, the high price of natural gas has made it impossible for cost-intensive companies to bear, or adopt measures to reduce production and costs, and even have to stop production.

In addition to increasing corporate costs, high natural gas prices may boost demand for crude oil.

The Organization of the Petroleum Exporting Countries (OPEC) predicts in an internal document that due to the shortage of natural gas, companies are forced to switch to oil for power generation, and the global oil market supply may be tightened. If natural gas prices remain high for a longer period of time, world oil consumption may increase by an additional 370,000 barrels per day, and oil inventories in developed countries will continue to tighten as a result.

Vido, the world's largest independent oil trader, predicts that the demand for other fuels will increase due to the shortage of natural gas. Crude oil demand is expected to increase by 500,000 barrels per day this winter.

Industry: companies need to make good reserves of natural gas

Domestic natural gas supply is divided into three categories: self-produced gas, imported pipeline gas, and imported liquefied natural gas. With the rise of international natural gas prices, the cost of imported liquefied natural gas in my country has also risen.

The Global Trade Monitoring and Analysis Center of the General Administration of Customs and the Shanghai Petroleum and Natural Gas Trading Center jointly released China's LNG comprehensive import CIF price index on September 22, showing that from September 13 to 19, China's LNG comprehensive import CIF price index was 116.11 ( CIF, excluding taxes and processing fees), was reduced by 9.87% from the previous month and rose by 71.41% year-on-year. Although the week-on-month ratio has been lowered, the overall trend is still in an upward trend.

Guanghui Energy told reporters that the current high international natural gas price has the greatest impact on imported liquefied natural gas (LNG), while the impact on self-produced gas is relatively small, and the impact on imported pipeline gas is the least.

"Customs data shows that my country is increasing the import volume of pipeline gas to reduce the demand for high-priced imported LNG spot. Although the CIF price is still hitting a record high in the same period, my country's spot LNG imports account for a relatively small proportion, so the impact on my country is relatively small. "Said Wang Shiwei, Index Research and Development Department of Shanghai Petroleum and Natural Gas Trading Center.

"The domestic natural gas price this winter will be higher than the same period in the previous year. It is recommended that companies prepare natural gas reserves before entering the winter, and if necessary, adopt hierarchical measures such as'suppressing the people to protect the people'. The natural gas supply and demand pattern this winter is largely affected by the temperature situation As a result, the warm winter will bring warmth to the natural gas supply situation, and the cold winter will make the situation of natural gas supply more difficult.” A person from Guanghui Energy said.