The gas crunch in Europe looked set to continue into October as Russia's Gazprom showed no signs of export growth, as power outages in China hit growth in the world's second-largest economy, threatening further pain for global supply chains.
Coal, oil and gas prices have all skyrocketed in recent weeks, hitting utilities and consumers from Beijing to Brussels, increasing inflationary pressures and risking a global recovery from the COVID-19 pandemic.
The fiery market underscores the scale of the task facing world leaders, who are under pressure to plan plans to phase out their economies from fossil fuels as they prepare for the climate negotiations at the COP26 summit, which begins Oct.
Europe, which relies on Russia for 35% of its gas supply, has seen the price of benchmark gas rise more than 350% this year. As a result, a number of European firms that supply gas or electricity to homes and businesses have closed.
The Czech Republic's energy regulator has taken the extraordinary step of asking suppliers to provide assurance that they can supply energy to homes and companies, after the country's electricity and gas groups have stopped supplying one after another.
A dozen or so suppliers in Britain have already gone bankrupt.
Asian power provider Ohm Energy said it has exited the retail electricity market in Singapore, the third company to do so in recent weeks.
Russia has said it is ready to supply more gas to Europe. Yet Gazprom (GAZP.MM), the Russian gas pipeline export monopoly, showed no signs of entering the race to allocate extra capacity.
Monday's auction results showed that Gazprom had reserved about a third of the additional gas transport capacity offered for the Yamal-Europe pipeline via Poland for November, and did not allocate any volume via Ukraine.
European politicians accuse Russia of using pressure as leverage to gain approval to launch the newly built Nord Stream 2 gas pipeline to Germany, whose permits are still months away. Gazprom and the Kremlin say the committed commitments have been fulfilled and they have not received any more pumping requests.
INTERRUPTIONS
China, which needs coal to power nearly 60% of its power plants, is grappling with a shortage of supplies and rising prices for the most polluting fossil fuel, leading to cuts in the electricity supply to factories and homes.
The constraints meant that the economy grew 4.9% in the third quarter, the slowest pace since the third quarter of 2020, and fell from 7.9% in the second quarter.
A Reuters calculation based on official data showed that China's average daily coal production in September was 11.14 million tons. China released figures showing last week's production was 11.2 million tons, which means it's barely moving.
"The Chinese government is losing its battle to control rising coal prices," said Alex Whitworth, Wood Mackenzie's head of energy and renewable energy research in the Asia Pacific.
A global recovery from the depths of the pandemic-induced slump has made all fossil fuel suppliers struggle to keep up.
Crude oil prices have soared more than 60% this year and were trading around $85 a barrel on Monday, as members of the OPEC+ oil production alliance struggled to pump out as much as the latest production deals allow.
European companies are among those afflicted by the rise in energy prices, adding to other challenges that include shortages of memory chips and shipping containers.
"Supply chain volatility has intensified globally," said Frans van Houten, chairman of the board of Dutch health technology firm Philips (PHG.AS), trimmed from its 2021 outlook. "We expect this headwind to continue in the fourth quarter." They made statements.
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