Harvest Global Markets :

Natural Gas prices are on a swift rise after Russia shut down flows to Germany through Nord Stream 1 last week.Europe is currently experiencing its worst-ever gas supply crisis, with energy prices skyrocketing and German importers considering the possibility of rationing in the EU’s largest economy. Moscow has blamed the interruption on a pipeline issue, but Europe views it as a possible response to Western sanctions against Russia for its invasion of Ukraine.

Following the announcement from leaders of G7 countries to put price caps for Russian Oil. The Russian state-owned energy firm Gazprom announced to halt the supply for an indefinite time period from the Nord Stream 1 pipe line, plunging the region into deeper energy crises. This disruption however, along with Gazprom’s blatant attempt to pin the fault on German energy giant Siemens, is the result of years of dysfunction in the Russian-German energy partnership.

European Union storage facilities were recently estimated at 81% full, refilling ahead of schedule, according to analysts. The reports suggest that the European inventory level shall be sufficient for the early winter months of November and December however, supply shortage may arise in the first quarter of next year with winter weather starting soon. The energy demand would rise both domestically and at industry levels ifthere is a cold winter or spring arrives late.

The cuts down in the natural gas supply could escalate the recession uncertainties in the Eurozone as increased energy prices can further amplify the soaring cost of living in the continent deterring consumers spending. This is bolstered by the expected 75 basis-point increase in the interest rate by the European Central Bank, in order to tame theprice hike, in its upcoming meeting on Thursday at 1715 HRS PKT.