Europe gas drops

Causes: European natural gas futures fell to their lowest level in almost two months as nations intensify their fight to beat the energy crisis with the start of the heating season less than two weeks away.

Effects: Benchmark prices dropped as much as 8.3 percent on Monday, extending last week's decline. Germany, Britain, and others plan to spend many billions to ease their reliance on Russian imports, rescue local energy companies, and cap prices to alleviate the burden on businesses and households.

Discussions on the European Commission's proposals to help reduce the impact of the crunch continue and need to be signed off by member states. The plans include raising €140 billion (S$197 billion) from energy companies' earnings, mandatory curbs on peak power demand, and increasing liquidity.

Germany's decision on Friday to seize control of Russian oil major Rosneft's German oil refinery assets is seen as just the first step in an overhaul that could see Berlin pressured to take over a big chunk of the energy sector in Europe's largest economy.

The government is also in talks to nationalize Germany's most significant gas importers, including Uniper and VNG, according to people familiar with the discussions.

The British government is developing a plan that may halve energy rates for many businesses, as part of a £40 billion (S$64 billion) support package being finalized by Prime Minister Liz Truss. 

France plans to cap energy price hikes for households at 15 percent starting next year, which will cost the government a net €16 billion in 2023, according to Finance Minister Bruno Le Maire.


What's in it for you:  Despite easing in recent weeks, gas prices are still more than seven times above the average for this time of year, accelerating inflation and putting economies on the brink of recession. Demand is expected to gradually creep up ahead of the Oct 1 start of the heating season. 

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