EU Scrambles to Contain Energy Price Crisis Ahead of Winter

The energy ministers of EU member states are meeting today to discuss how to tackle a worsening energy price crisis as winter approaches, and with it, peak heating demand season.The meeting follows reports from Wednesday citing Energy Commissioner Dan Jorgensen as saying a series of refinery closures in EU member states over the past 20 years was a mistake as the diesel squeeze pushes prices to all-time highs. Natural gas prices in the EU, meanwhile, touched 100 euro per MWh on Wednesday, contributing to the sense of urgency.“We are in a very serious situation now. It does not look like we have a security of supply issue but I would warn against neglecting that,” Jorgensen told media yesterday, as quoted by Reuters. The discussions today may involve reducing electricity bills by cutting taxes and grid fees, the publication suggested, citing earlier ideas floated by the European Commission. Another of these ideas is easing some technical requirements for refineries in a bid to make refiners ramp up production.The European Union countries are entering winter with much lower than usual gas in storage, at some 75%, versus over 80% over the past five years. Despite this, LNG buyers are reducing their purchases, with the total for the week to October 9 at 30% lower than a year earlier, a Rystad Energy analyst warned, saying “As winter approaches, Europe has less of a storage cushion ‌than needed and fewer options to quickly replace disrupted supply.”“While mild weather has kept heating demand subdued, temperatures alone can’t reverse the vulnerability faced by the continent,” Mathieu Utting also said, echoing concerns voiced by other analysts previously about the EU’s risky reliance on a mild winter to keep a lid on energy prices that have been severely disturbed by the wars in Ukraine and the Middle East.By Irina Slav for Oilprice.comMore Top Reads From Oilprice.comOil Prices Fall as Vance Moves to Restart Iran Peace TalksInvestors From 119 Countries Pile Into Dangote’s Record Refinery IPOU.S. Lawmakers Warn Banks Against Trump's Russian Diesel Deal