European gas prices hit three-year high

{"text":[[{"start":6.86,"text":"European natural gas prices hit their highest since 2023 and oil touched a five-week high of $97 a barrel on Wednesday as the resumption of hostilities between the US and Iran raised fears of a return to full-blown conflict and prolonged global inflation."}],[{"start":21.783,"text":"The price of natural gas trading at the European TTF hub in the Netherlands broke above €75/MWh for the first time since the start of the war in February, reaching its highest level since early 2023, as energy companies grow increasingly anxious about heading into winter with scarce stores for colder weather."}],[{"start":41.78,"text":"Brent crude, the international oil benchmark, rose as much as 2.5 per cent to just over $97 before retreating to trade 0.4 per cent higher at $95 in London."}],[{"start":53.66,"text":"The advances followed a wave of strikes by the US against Iran on Tuesday, its second round in recent days, which deepened investors’ fears over the spectre of further escalation between the foes after a month of relative calm in August."}],[{"start":66.98,"text":"“The perception that this [conflict] is all going to be over by Christmas is fading fast,” said Mike Bell, head of market strategy at RBC BlueBay Asset Management. “That’s driving the market.”"}],[{"start":null,"text":"

"}],[{"start":79.02,"text":"Washington and Tehran are vying for control of the Strait of Hormuz, a key waterway for oil supplies."}],[{"start":84.3,"text":"European gas prices have been grinding steadily higher since hitting a low of less than €40/MWh at the end of June, while Brent crude has risen from a wartime low of $70 a barrel in early July. The rise in prices continued to rattle global bond and stock markets on Wednesday, reigniting concerns that the global economy could face a period of lasting inflation."}],[{"start":107.4,"text":"The yield on the 10-year US Treasury rose to 4.81 per cent on Wednesday morning, taking it to the highest level since 2023."}],[{"start":115.451,"text":"The 10-year German Bund yield was up 0.04 percentage points in early trading at 3.38 per cent, keeping the country’s borrowing costs at their highest level since 2011."}],[{"start":126.445,"text":"UK borrowing costs hit a post-2008 high for the second consecutive day, with the 10-year gilt yield up 0.04 percentage points at 5.26 per cent."}],[{"start":null,"text":""}],[{"start":140.3,"text":"Gas companies traditionally store up supplies over the summer months to smooth out any disruption over the winter, but this year stores are at their lowest level for more than a decade. Across the EU, stocks were only 63 per cent full in the last week of August."}],[{"start":156.02,"text":"Germany, which has the largest volume of gas storage on the continent, warned last week that it risks failing to meet its statutory target of 70 per cent full by November."}],[{"start":165.3,"text":"As prices have risen, energy companies have been reluctant to buy expensive gas to store it, preferring to wait for a resolution to the conflict in the Middle East and lower prices."}],[{"start":174.649,"text":"“I have been saying for six months that we need to be more careful about storage or we will have high prices going into winter,” said Anne-Sophie Corbeau, a gas expert at Columbia University’s Center on Global Energy Policy. “I would be very careful about not being too complacent because we have seen again and again that when problems arrive, they all come together,” she added."}],[{"start":196.74,"text":"The advance in gas prices has put particular pressure on European bond markets. Eurozone inflation accelerated to 3.3 per cent in August, official figures showed on Tuesday, with energy prices up 14.3 per cent."}],[{"start":210.288,"text":"Mohit Kumar, chief European economist at Jefferies, said the investment firm was “toning down” its exposure to riskier assets following the advance in energy prices."}],[{"start":220.473,"text":"Kumar said bond yields were “reaching a level where a further sell-off in rates would be increasingly negative for both equities and credit”."}],[{"start":230.58,"text":"Futures contracts tracking the S&P 500 were pointing to another decline on Wednesday, adding to a drop of more than 1 per cent already so far this week."}],[{"start":239.98,"text":"Japan and South Korea, two major oil importers, led declines in Asian equities, with the Nikkei 225 down 3 per cent and the Kospi 3.8 per cent weaker."}],[{"start":253.1,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1788340267_6060.mp3"}