IEA warns that much higher fuel prices are coming in Q4

[dan_s]

IEA Warns Of A Spike In Energy Prices This Winter
By Irina Slav - Jul 03, 2023, 1:55 AM CDT

> The head of the International Energy Agency has said that energy prices could rise again this winter, potentially forcing governments to subsidize consumption.
> A combination of China’s economic recovery and a harsh winter in the northern hemisphere has the potential to send energy demand climbing.
> The warning from the IEA echoes the recent message from Germany’s energy regulator that the energy crisis isn’t over yet.

Energy prices could spike again this winter, the head of the International Energy Agency has warned.

Speaking to the BBC, Fatih Birol said that if China’s economic recovery from the pandemic accelerated later this year and the winter in the northern hemisphere was harsher than last year’s, prices would rise.

If that happens, governments would need to step in again and subsidize energy consumption, he said.

"In a scenario where the Chinese economy is very strong, buys a lot of energy from the markets, and we have a harsh winter, we may see strong upward pressure under natural gas prices, which in turn will put an extra burden on consumers," Birol told the BBC.

What’s more, Birol said he could not rule out blackouts in the winter, which could be “part of the game”.

Last month, the head of Germany’s energy regulator issued a similar warning for winter 2023/24. Speaking to local media, Klaus Mueller said the energy crisis in Europe was not over yet and if the winter was cold, supply could fall short of demand.

"When it comes to storage (tank) filling, we are now at a different level to last year ... But the biggest factor remains the weather," Mueller said in early June, as quoted by Reuters. "The energy crisis is not over yet," he added.

China remains the single biggest factor that will influence energy prices for the remainder of the year. So far, its economic recovery has been bumpier than initially expected, and this has led to lower energy prices on world markets.

But industrial activity might yet accelerate with the help of government support, and this would push prices higher for all buyers.

Add to this the doubtful likelihood of a repeat of last year’s unusually warm winter and the potential for energy price—and supply—uncertainty rises significantly.

By Irina Slav for Oilprice.com

[ChuckGeb]

Lot of “ifs” in there. If we had a cold winter in 2022/23 winter like forecast we wouldn’t have had $2 gas this year.

[dan_s]

The IEA forecast is based on a normal winter for Europe. I think they are called "normal" for a reason. Plus, what happens in Europe won't have a significant impact on U.S. natural gas prices anyway.

If the Freeport LNG export facility had not been shut down for over 200 days, US natural gas prices would probably be over $3.50 today.

Market Forces are going to rebalance the U.S. natural gas market, but it will be 2025 before we see gas over $5.00 again. Just 18 months away.

[Fraser921]

Chuck you are funny no ifs and or buts!
> What’s more, Birol said he could not rule out blackouts in the winter, which could be “part of the game”.

We should have a rule in “the game” a politician has to resign when s blackout happens, no ifs ands or buts.

The insanity is making me crazy