The surge in European gas prices is tied to the Asian shortfall in coal supply, strategist says

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As the prices for key U.K. and Dutch natural-gas contracts surge, the culprit is the shortfall in coal supply in Asia, one strategist says. On Tuesday, Dutch TTF gas futures jumped 11%, and the U.K. natgas contract GWMV21, +11.30% jumped 12%. The Dutch contract traded at €85 per megawatt, up from €20 as recently as April. Tom Price, head of commodities strategy at Liberum Capacity, says even as Europe and the U.K. has reduced its coal power generation capability over the last 30 years, they’re still very much tied to coal markets worldwide, because power generators globally switch between gas and coal. When the Chinese economy emerged from lockdown, there was a 10% jump in power demand, resulting in power requirements well above pre-virus levels. A subsequent rise in Asian seaborne coal prices prompted power generators to switch to gas. At the same time, provincial governments in China are forcing coa
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