China’s energy crisis worsened on Friday with coal prices at a record high as the cold weather passed and gas prices rose, prompting major energy companies to seek long-term deals with suppliers. Americans, sources told Reuters.
Energy security has reached the top of government agendas in Asia and Europe, as shortages of coal and gas prices have led to power cuts and drowned factories supplying reputable brands such as Apple, just when the world economy wakes up from coronavirus restrictions.
To protect consumers from high prices as winter approaches, European Union leaders appear willing to give the green light to Member States’ emergency measures, including price constraints and subsidies, in a next week’s summit.
China, the world’s largest exporter, has been particularly hard hit, and to bridge the gap, major energy companies such as Sinopec Corp. and China National Offshore Oil Company (CNOOC) are holding advanced talks on long-term contracts with US gas exporters. liquefied natural gas (LNG), sources told Reuters.
The talks could lead to agreements worth tens of billions of dollars that would mark an increase in China’s LNG imports from the United States at a time when relations between the two countries are still strained. At the height of the Sino-US trade war in 2019, gas trade came to a brief halt.
“As state-owned enterprises, all companies are under pressure to maintain security of supply and the recent price trend has profoundly changed the image of long-term supplies in the mind of leadership,” said a Beijing-based trader.
In a hard blow to the fight against global warming, China and other countries have turned to coal in the short term. Beijing has also taken a number of measures to contain price hikes, including increasing domestic coal production and reducing supply to energy-intensive industries.
January’s most active Zhengzhou thermal coal futures CZCc1 contract hit a record high of 1,669.40 yuan ($ 259.42) per tonne early Friday, after rising more than one 200% to date.
China has assured consumers that energy supplies will be guaranteed during the winter heating season.
THE OIL CONTINUES TO CLIMB
President Vladimir Putin told Europe this week that Russia, the region’s largest gas supplier, could supply more gas if asked, but some European politicians accuse Moscow of using the fuel crisis as leverage, a charge that Russia denies.
Oil prices rose again on Friday to trade not far from the high since 2014, close to $ 85 a barrel of Brent benchmark crude, as the global gas and coal crisis encourages some consumers to switch to products refined.
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