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The Point of Ayr Gas Terminal in Talacre, Wales, on September 20, 2021.
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A global energy crunch is sending natural gas prices soaring in the U.K., Europe and Asia hitting record highs. However, experts say the stratospheric prices seen in Europe are unlikely to carry over to the States.

Much will ultimately depend on what the winter weather brings. But the U.S. is better positioned heading into the colder months given that it’s the world’s largest natural gas producer, and because inventory levels are not as depleted as they are in Europe.

“We’re at a unique point in time now where just all energy prices are going up,” Francisco Blanch, head of global commodities, equity derivatives and cross-asset quantitative investment strategies at Bank of America Merrill Lynch, said last week on CNBC’s “The Exchange.” “The U.S. is much more insulated from this global energy trend than the rest of the world,” he added.

That’s not to say U.S. prices won’t be volatile. Natural gas futures settled at their highest level since December 2008 on Tuesday. On Wednesday, the contract traded as high as $6.466 per million British thermal units (MMBtu). 

Natural gas for November delivery has since eased from that level, but it’s still on track for the seventh straight week of gains. The contract currently trades around $5.63 per MMBtu, which is more than double where prices were at the beginning of the year. 

But the moves abroad are far more extreme. Analysts at Deutsche Bank noted that in Europe prices are up five fold, while in the U.S. and Asia prices are about 1.5 times higher. In Europe, the price spike in natural gas is equivalent to if oil were trading around $200 per barrel.

“The importance of these moves on inflation, growth and external accounts are not to be underestimated,” the firm wrote in a note to clients. “These price moves are a big deal.”

Coal and oil prices are also jumping. West Texas Intermediate crude futures, the U.S. oil benchmark, topped $80 per barrel on Friday for the first time since November 2014. International benchmark Brent crude, meanwhile, traded at its highest level since 2018. Analysts say that elevated natural gas prices could even prompt utilities to swap the fuel for oil.

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Why are prices jumping?

A number of factors are fueling the price surge in natural gas and commodities like oil and coal more generally.

Demand is rebounding as economies get back to business and consumers return to pre-pandemic activities. At the same time, producers, who suffered through 2020’s unprecedented downturn, have been slow to hike output. 

A colder and longer-than-expected 2020 winter meant that European inventory levels were below average heading into the fall. On top of that, slow wind speeds and dry conditions weighed on renewables’ energy output. Carbon offsets are pricey and the continent has moved away from coal-fired plants, meaning everyone was suddenly competing for natural gas.

Europe’s gas production has declined over the last two decades, and the continent now depends on imports from Russia. The country has limited supplies to Europe this year in what some have called a politically motivated move, although this week President Vladimir Putin said Russia could boost output in an effort to alleviate the strain in Europe. 

Europe is not the only place in need of supplies. Asian demand is jumping as countries including China look to shift away from dependence on coal. In some cases, cargoes are bypassing Europe for Asia, where they can get better prices. 

The Oxford Institute for Energy Studies summarized this confluence of factors, noting it creates “this perfect storm.”

What about in the U.S.?

While the U.S. has its own power problems, as demonstrated in Texas last winter when millions of customers were left in the dark for multiple days, the same price jump and energy crunch playing out in Europe and Asia is unlikely to happen.

“[The U.S.] hasn’t had to rely on the rest of the world to provide its supply and that’s really what Europe’s problem has been,” said Robert Thummel, managing director at TortoiseEcofin. He noted that the shortage stems not from a lack of supply, but rather from a lack of infrastructure — specifically for liquified natural gas. 

“You’re not going to see the U.S. to the rescue here, because there’s just not enough infrastructure on either side — on the U.S. side or the European side and most importantly on the Asian side to solve this,” he added.

At the end of the day, Thummel said his forecast for natural gas prices all comes down to weather. A normal winter could see prices stay slightly elevated in the $3 to $4 range, while warmer-than-expected temperatures could see a retreat to between $2.50 and $3. On the flip side, if temperatures drop prices could spike into the double digits.

While the U.S. is in a better position than Europe heading into the winter, such wild swings in overseas energy markets do have cascading effects around the globe. This week Credit Suisse lifted its forecast for fourth-quarter prices by more than 60% — from $3.50 MMBtu to $5.75 MMBtu.

“The near-term set-up around winter storage inventories and increasingly tight global demand fundamentals have proven more bullish than we had anticipated,” the firm wrote in a note to clients. While the new target is elevated relative to average prices in recent years, it’s still below the $6 level natural gas crossed last week.

JPMorgan, meanwhile, raised its 2022 annual average price forecast by $1.70 MMBtu to $4.81 MMBtu in a note titled “unthinkable upside, limited downside.” The firm made sure to point out that it’s atypical to adjust forecasts right before winter weather reports become available. But this time it was warranted. Analysts said there was an “absolute need” to adjust forecasts given the “risks that are plaguing this balance at the current time.”

“We go where the US supply and demand balance takes us, and it has taken us to a place that hasn’t been visited in quite some time,” the firm said. For the current quarter, JPMorgan envisions prices averaging $5.50 MMBtu, which would bring 2021’s average price to $3.65 MMBtu.

While the energy crunch is likely the primary driver of the price action, some of the volatility could also be from Wall Street firms shorting futures into the massive rally, and subsequently being forced to cover positions.

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Podcast: GMC Sierra EV Denali first drive, Hyundai Ioniq 9 unveiling, Jaguar rebranding, and more

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Podcast: GMC Sierra EV Denali first drive, Hyundai Ioniq 9 unveiling, Jaguar rebranding, and more

In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss our GMC Sierra EV Denali first drive, Hyundai Ioniq 9 unveiling, Jaguar’s rebranding, and more.

Sponsored by ALSET Auto: North America’s leader in paint protection and restyling; offering colored wraps, paint protection, window tint, ceramic coatings and more, exclusively on EVs.

The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.

As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.

After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:

We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.

Here are a few of the articles that we will discuss during the podcast:

Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET):

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The electric Chrysler Pacifica is finally coming, but not soon enough

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The electric Chrysler Pacifica is finally coming, but not soon enough

It’s official: Chrysler will finally launch an electric Pacifica minivan. The company is developing clever storage ideas that could make it even more functional than Volkswagen’s recently introduced ID.Buzz. But you’ll have to wait a little longer to get your hands on one.

Chrysler confirms plans to launch an electric Pacifica

Chrysler has yet to release its first fully electric vehicle. Although the nearly 100-year-old automaker has teased several EV concepts, we have yet to see one come to fruition. That will change soon.

Earlier this year, the company revealed its Halcyon Concept, a futuristic sports car-like EV drastically different from Chrysler vehicles currently on the road. The model builds on previous concepts, like the Airflow crossover introduced in 2022.

Chrysler’s CEO, Christine Feuell, said the Halycon would be brought to life with advanced new tech from parent company Stellantis, sleek new styling, and a software-defined connected cockpit.

The radical design will be used in future Chrysler vehicles, including the electric Pacifica. At the LA Auto Show this week, Feuell confirmed to GreenCarReports that the Pacifica is due for an overhaul in 2026. The refresh will lay the groundwork for the first electric Pacifica, which is expected to launch the following year.

electric-Chrysler-Pacifica
Chrysler electric Halcyon Concept (Source: Stellantis)

Chrysler’s CEO hinted the upcoming Pacifica EV could challenge Volkswagen’s ID.Buzz, the first electric minivan to arrive in the US.

While you’ll need to remove the seats for that open-air space in the ID.Buzz, Chrysler is working on more functional solutions. According to Feuell, the company is developing a system like its patented Stow ‘N Go Seating to open up space in the rear.

electric-Chrysler-Pacifica-interior
2025 Chrysler Pacifica PHEV interior (Source: Stellantis)

Although nothing is set in stone, one option is adjustable front seats, enabling the second row to be stored underneath.

Electrek’s Take

As Chrysler’s only production model in 2024, it only makes sense to launch an electric Pacifica. The Pacifica hybrid was the fourth best-selling plug-in hybrid in the US in Q3. It also accounted for 14% (3,009) of the 21,504 Pacifica models sold last quarter.

Meanwhile, the company is quickly losing market share in the US. Pacifica sales crashed 44% in Q3 and are down 18% through September.

Several new larger electric SUVs, like the Kia EV9, are already hitting the market, and more are on the way, including the recently unveiled Hyundai IONIQ 9. With the electric Pacifica not due out until 2027 (at the earliest), Chrysler will likely continue losing ground as new, more advanced competitors roll out.

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Tesla converts Shell gas station into Supercharger and it looks awesome

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Tesla converts Shell gas station into Supercharger and it looks awesome

Tesla has converted an entire Shell gas station into a Supercharger station for electric vehicles in Spain, and it looks fantastic.

One of the favorite arguments of electric vehicle naysayers is that there are not as many charging stations as gas stations – making EVs less convenient.

The argument is flawed since most EVs are charged overnight when parked, and they can be charged literally anywhere there’s an electric outlet, which is not the case with gas-powered vehicles.

Most of the time, charging electric vehicles is more convenient than refueling a gas-powered car, and that’s going to become more widespread as time goes on because there are more charging stations being deployed, and many gas stations are going away.

In some markets where electric vehicles are being adopted at a higher rate, like in Norway, gas stations have been closing left and right.

In some cases, EV charging stations are directly replacing some.

Today, we get to see a beautiful example in Cordoba, Spain, where Tesla took over a Shell gas station and converted it into (hat tip to Aland≡Bru on X):

While it is not completed, it’s particularly interesting to see that Tesla has kept a similar design to the classic gas station setup.

To be fair, this is not exactly a new concept. There’s even a company that specializes in replacing gas stations with EV charging stations.

We have also previously seen gas station operators replacing gas pumps with charging stalls.

Interestingly, even the oil giant Shell, which is seeing its gas station here replaced by a Tesla Supercharger here, is investing in electric vehicle charging through several new efforts.

The only thing missing to this charging station is solar power, which is the best way to charger your electric car, and the best solar is on your home. If you want to find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage. EnergySage is a free service that makes it easy for you to go solar – whether you’re a homeowner or renter. They have hundreds of vetted solar installers competing for your business (including Tesla and Powerwall certified installers in some markets), ensuring you get high-quality solutions and save 20 to 30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.

Your personalized solar quotes are easy to compare online, and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.

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