Europe is in danger of running out of electricity if there is a prolonged cold in winter, according to the director of Trafigura, one of the world’s largest retailers.
Speaking of FT Commodities Asia Conference, Jeremy Weir said there is not enough natural gas in the region despite promising to grow more from Russia.
“Right now we don’t have enough air. We are not saving the winter, ”he said. “So there is real concern.
President Vladimir Putin last month ordered Russia’s gas giant Gazprom to begin filling its German-Austrian-controlled stockpiles, raising hopes of European shipments.
However, there has been a slight increase from Russia last week and on Monday Gazprom saved a few pipelines in December. Russia said refused to ban export in Europe but is accused by lawmakers of trying to force Germany to speed up clearance the opposite Nord Stream 2 pipeline.
European prices fell slightly last month but remain four times higher than last year and have risen sharply in recent days. Some factories have already cut production due to price tags, including the Trafigura Nyrstar zinc business, but there are fears that the market will remain stable until spring. Europe relied heavily on natural gas after reducing emissions from coal.
Governments are expected to cut off gas from non-essential industries before allowing the electricity grid to be affected, but Weir’s comments show the depth of the electricity sector.
Weir said the dramatic rise in natural oil prices has “been difficult” for companies. Some traders were forced to do so cutting off natural gas reserves thanks to mobile phones – they need extra money to hide hedging deals.
“At one point, I was thinking about starting over [payment] was another equivalent to 25 percent of the price. The market was about to collapse, “Weir said.
However, Weir said the secret Trafigura, which is operated by offices in Geneva but based in Singapore, is preparing for another “very strong” year.
“You will see from our results when it is published that we have increased our investment and that the company is much stronger than it was two or three years ago.”
In June, Trafigura announced record the profit for half a year as the rising tide of healing in demand by oil prices and steel.
Turning to oil, Weir said the market remained “very strong” and the lack of funding for new projects meant that the “three-fold population” was “good and fair on the cards”. Brent crude was selling $ 81 barrels on Monday, up from $ 50 earlier this year because demand increased following a reduction in closure bans.
“We do not see any change in the barn. “Oil has gone from 15 years to 10 years in the short term,” he said.
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Trafigura is one of the most powerful retailers in the world, carrying 6.4m barrels per day of mixed oil and other products based on its latest results.
Earlier in the year, it paid € 7.3bn a share of 10 percent in a Arctic oil project is being developed by a Russian oil company sponsored by the state-owned Rosneft.
Weir said decarbonisation, or a change in cleaning power, would not occur “in exchange” for the reason that crude oil would be needed for a while.
“I feel strongly that we still need to invest in these industries to provide future energy,” he said.
Weir said Trafigura, which is growing into a renewable energy and carbon market, will continue to sell coal while still having to “move”.
“One of the great problems we face is. . . and that developing countries still need this as fuel, “he said.
At the UN COP26 summit last week, India and China weakened efforts reducing coal power. Instead of committing to “eliminating” perpetual charcoal, the participating countries agreed to “reduce” burning oil.
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