Capping gas prices could cost the French dearly

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The European Commission proposed a gas price cap and EU energy ministers met at the end of November to discuss it.

But as usual, the 27 could not come to an agreement…

“Gas Plant” made in Brussels

Spain and France are among the countries that want this cap.

The mayor of Bruno championed the idea because it allows: “imposing a maximum price on the manufacturing companies”.

It is known: in a market economy, it is the customers who put the purchase price on the producers they depend on…

So what will manufacturers do?

Well, they would sell what they produced to other customers at market price!

The Minister of Energy of Russia responded as follows [1] early September: “Any move to impose a price cap will create deficits in their (initiating countries’) markets and increase price volatility“.


Other ministers do not have the level of Bruno mayor, and some of them realized that this measure would be dangerous above all for the country. own savings.

Because if Brussels manages energy prices, it will upset the delicate balance between supply and demand.

By distorting prices in Europe, world prices would be highly volatile.

They especially don’t want to sink German and Dutch industries increased costs their power supply.

And that’s why they do their best to prevent this price limit from being implemented in practice!

Maybe you think it’s enough to give up on this stupid idea?

But no!

Because the European Commission must save face and show the people that it is strong against Putin.

So he does his political advertising in the media:

But in reality there will be no mechanism has no effectbecause to activate it you will need:

– that the price of gas exceeds the stratospheric amount €275 per megawatt hour ;

– and in addition, this amount is exceeded during this period its duration is 14 days.

Under these conditions, even last Augustwhen the energy crisis was at its peak and gas prices were at historic highs…the cap wouldn’t have been triggered!

Good European Commission.

But by the way, why are the prices so expensive?

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They created a problem that didn’t exist

The increase in prices is not due to a decrease in world supply.

Our main supplier, Russia, has not reduced production either.

“Gazprom”, which delivers the gas to us, did not close the taps of the gas pipelines.

So that why are prices rising? ?

Because European leaders wanted to impose “economic sanctions” on Ukraine’s economy at the beginning of March after Russia’s intervention in Ukraine!

And for this they disrupted the world’s demand for gas:

– excluding Russian banks from the SWIFT system, which complicates payments for supplies initially planned for 2022;

They decided to stop importing Russian gas at the end of 2022 (and I’m not even talking about the sabotage that destroyed the Nord Stream 1 and 2 pipelines…).

Hence these decisions policies.

The European Union has created a major upheaval in global supply chains.

European countries had to run to all other producers to replace Russian gas.

This increased demand pressures and prices reached levels NEVER SEEN!


Gas prices from January 2022 (in megawatt hours).

There is a short peak at the end of February (start of war)but then the price drops again and stabilizes.

It flies again indeed Since the end of June, after the sanctions that forced us to find an alternative to Russian gas!

Today, European stocks are full for the winter, so demand is decreasing and the price has fallen back to acceptable levels.

But what do you think will happen in the spring of 2023, when Europe will again have to import gas massively without going through Russia?

And in the end, you pay for their inconsistent management…

What are the predictions for 2023?

Price volatility will remain significant as the conditions that caused gas prices to explode in 2022 will still be present in 2023.

But the most important thing is that there has been a historic change in supply schemes.

And it goes changing the global gas market in the long term.

Therefore, I am sure that American liquefied natural gas (LNG) This will be the biggest winner of the energy crisis.

Who is Mark Schneider?

Marc Schneider is the founderArgo Publications, a financial publishing and investment research company. Its free newsletter draws more than 60,000 readers each week.

Ancient Risk managerMark helps his readers understand the inner workings of investing in the stock market and cryptocurrencies control over their financial future.

His newsletter covers various topics: new technologies, cryptocurrencies, investment psychology or even geopolitics… with the common denominator: understand the world around us to better manage your finances.

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