Waiting for proposals to be submitted Commission to do energy crisisits meaning natural gas they fell yesterday for the fourth day in a row. The reason for the positive development is mainly the positive news of recent days about the filling of European tanks, which are working to calm any concerns about a new cut in fuel supplies via Nord Stream 1. Futures fell 7.2%, down about 33% from last week’s highs. Germany has its own prices. electricity have fallen over the past three days by 54% compared to the highs of the previous week. They have fallen to 486 euros per megawatt hour from 1,000 euros to which they jumped a few days ago. However, current prices are still about 10 times higher than the average over the last decade.

Among the factors that contributed to the fall in prices are a decrease in demand for fuel and an increase in imports. liquefied natural gas (LNG). Even if Russian gas is cut off after September, storage capacity in Europe will keep prices in check if demand remains 10% lower and LNG imports continue, Citigroup estimates. Citigroup estimates that in August gas consumption in Europe fell by 12% compared to the same period last year.

Meanwhile, economic analysts at Gzero warn of the possibility of reversing this reduction in consumption if a cap on gas prices is chosen as a means of combating the energy crisis. As they note, cheap gas could, for example, encourage Europeans to consume more fuel just a month after EU member states agreed to voluntarily reduce consumption by 15% by April next year. In this case, analysts say, increased demand will lead to higher prices, which will gradually make subsidies unacceptable to governments. At the same time, it would run the risk of over-indebted countries such as Italy and Spain borrowing more in an attempt to protect their citizens from high bills.

Declining demand, increasing storage capacity, and increasing LNG imports are driving prices down.

Yesterday, Finland also announced household support measures, and this is an 800 million euro package intended for economically weaker households. They are part of the budget agreed by the parties of the ruling coalition for next year, and are aimed at mitigating the effects of ever-accelerating inflation and skyrocketing energy prices. In announcing projected spending, the government yesterday stressed that the 2023 budget would run a €8.1bn deficit on a total spending of €80.5bn. This was preceded on Wednesday by Berlin’s announcement of a support package for German households with an estimated cost of 40 billion euros.

Meanwhile, international houses and financial analysts see a recession at the gates of the Eurozone and warn that it will be the deepest. In its report, Fitch Ratings stresses that the gas crisis will hurt eurozone GDP, losing 1.5 to 2 percentage points next year, with Germany and Italy hit hardest. After all, he characterizes a recession as a possibility of the beginning of the second half of 2022 and emphasizes that, despite active efforts to diversify energy sources, the economic consequences in the event of interruptions in Russian gas supplies will be significant. However, there is hope that the economic impact of the gas shock will subside sharply in 2024, as production and consumption patterns will be properly adjusted by then and new gas infrastructures will be put into operation.

Quite ominous are Pictet Wealth Management’s estimates, which are revising their Eurozone growth forecast downwards and expect it to drop from 2.9% this year to zero next year. After all, he warns that inflation has yet to peak, which he predicts will jump to double digits even in 2022 and remain high for a long time to come.