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By Lars Paulsson

(Bloomberg) —

European energy markets from natural gas to carbon permits jumped to records early on Tuesday as the shortage of Supplies will only get worse just as the winter season starts. 

Stocks of everything from natural gas to coal and Norwegian water for electricity production are dwindling and there are very few signs that it will get better anytime soon just as demand comes roaring back after the pandemic. Many of the U.K.’s smaller energy suppliers have folded and Europe’s miners have warned that the unprecedented prices could disrupt their shift away from fossil fuels. 

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“Europe’s supply-demand balance will remain unusually tight heading into the winter, adding further price pressure to a market already at record highs,” BloombergNEF analysts wrote in a report published on Tuesday. 

Dutch front-month natural gas futures surged 12%, while carbon futures jumped 2.2%. German electricity for next year and U.K. gas also climbed to a new high. 

The latest warning that the power crunch is spreading across Europe comes from the Norwegian grid operator Statnett SF, which said the power balance in the southwest of the country is “pressed” because of low inflows and falling stocks. 

That could crimp exports of electricity to the U.K., Germany and Denmark via cables located in that part of the country. 

“There is now a very low amount of water, for this time of year, in many of the reservoirs here,” Statnett said. 

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