(Bloomberg) — The deepening global energy crunch has pushed natural gas in Europe and Asia to the equivalent of about $190 a barrel, something the oil market has never seen.
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Both regions saw fresh records in the heating and power-generation fuel this week as utilities rush to restock lower-than-average inventories ahead of winter in the northern hemisphere, while alternatives — like coal — are also in short supply.
Dutch front-month gas hit 100 euros a megawatt-hour early Friday, its highest ever, before retreating later. That’s about $190 per barrel of oil equivalent, more than double the value of the energy in a barrel of Brent crude oil the same day. The benchmark oil contract had its record of $147.50 a barrel in July 2008.
On Thursday, the Japan-Korea Marker, North Asia’s benchmark for spot liquefied natural gas shipments, surged to $34.47 per million British thermal units, the highest on records going back to 2009, according to price reporting agency S&P Global Platts. Converting that into oil units, also gives a price of about $190 per barrel of oil equivalent.
Energy prices are rising from the U.S. to Europe and Asia as economies recover from the pandemic while supply lags behind. Depleted storages after the past winter, colder and longer than usual, coupled with reduced field investments in some regions and heavy maintenance deferred from 2020 because of Covid restrictions, all contributed to the global crisis.
Read also: Europe’s Energy Crisis Is Coming for the Rest of the World, Too
The supply crunch is rippling across other markets, supporting oil prices as well since utilities are struggling to get any alternatives to gas that they can, including fuel oil for power generation and heating.
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