1. Price-rises ahoy
The wholesale markets in gas and power have responded instantly (particularly in the forwards) to three big European news items of the last two days:
- Admission by EDF they have discovered welding problems and other issues in the reactors of "several" of their French nukes. My spies tell me it's 20 out of their total 58 in France. If they have to fix this in short order - and the French nuclear regulator is surprisingly independent and stern - the price of electricity for the whole of Europe will rise steeply
- Europe's original and biggest (by far) gas field of the modern era, Groningen in the Netherlands, is having its output severly reduced with premature closure altogether in 2022. This is because of the increasingly damaging earthquakes being caused by the gigantic scale of operations there over 50 years. Groningen is a true monster, even by global standards, and the bedrock of north European gas supply for half a century. Impact on price is pretty obvious ...
- On top of these two physical problems, a man-made issue: Poland has won a court case limiting Gazprom's access to an important gas pipeline, which in turn will limit their ability to utilise their Nord Stream 2 system which is designed to outflank their previous dependancy on Ukraine as an export route. A bit involved, I know - but that, too, is causing prices to rise!
2. GE the new Enron?
GE is going under. That's what someone thinks. “GE’s $38bn in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds.”