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In our Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.
Europe cuts gas demand by a quarter in a bid to shed reliance on Russia
EU countries cut gas demand by a quarter in November even as temperatures fell.
It is the latest evidence that the bloc is succeeding in reducing its reliance on Russian energy since Moscow’s full-scale invasion of Ukraine.
Provisional data from commodity analytics company ICIS showed gas demand in the EU was 24 per cent below the five-year average last month, following a similar fall in October.
In 2021, the EU imported 155bn cubic metres of natural gas from Russia.
With European citizens having help through autumn with the unseasonable warmth the temperatures are starting to drop closer to normal levels.
In Germany and Italy, the EU’s two largest gas-consuming countries, demand fell 23 and 21 per cent respectively in November.
In France and Spain, it fell more than a fifth and in the Netherlands by just over a third.
Europe has also imposed sweeping new restrictions on Russia’s oil exports to limit its use of that energy source too.
War and adverse weather set to keep food prices high
Climate change and the war in Ukraine are set to keep food prices at far higher levels than before the Covid-19 pandemic.
Wholesale food prices have stabilised over recent months.
Hopes that the surge in the retail cost of staples such as rice, bread and milk seen in the past two years would diminish in 2023.
After several years of bumper crops thanks to favourable weather conditions, grain prices firmed during the pandemic because of hoarding by consumers, companies and governments.
Although costs have fallen back from the peak, prices remain high by historical standards and data from consultancy CRU show fertiliser remains unaffordable for many.
Russia’s invasion has affected three Ukrainian crop cycles so far. The 2021 harvest was prevented from leaving the country once the war broke out.
The 2022 crops faced harvest and infrastructure issues, with key areas becoming war zones. Next year’s crop yields are expected to fall sharply.
