Demand > Supply

Lots of reasons for demand being up
Lots of reasons for supply being down

*and then* Putin called NATO’s bluff and invaded Ukraine so the West declared economic war on Russia, meaning the West has had to try to buy energy elsewhere from a smaller pool of suppliers who have decided ‘wahey!’ and increased their prices.

*and then* Putin decided to weaponise energy and cut supply into Europe, meaning the EU has had to try to buy energy elsewhere from a smaller pool of suppliers who have decided ‘wahey!’ and increased their prices

So in the energy supply chain you have energy producers making bank, energy wholesalers pulling their hair out getting supplies together but making bank, energy B2B retailers pulling their hair out trying to maintain profit margins, energy B2C retailers pulling their hair out and going bankrupt, B2B energy customers getting bent over, and B2C customers being shielded from much of this until October. (Then less shielded in Jan. and from April I guess they’ll mostly be paying close to the true cost of supply.)

By an odd quirk available global energy ‘supply’ is about the same but because of war, politics and geography the supplies available to ‘us’ are much more expensive. Which feeds into the prices we pay and the prices businesses pay (which will feed into the prices we pay for their products).

Posted By: CWC on August 26th 2022 at 17:10:37

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