This is why European energy prices are breaking records

In a sign of worsening supply shortages, energy markets in Europe are hitting new record highs.

European energy markets from natural gas to carbon permits jumped to records, signaling the supply shortage will get worse just as the winter season starts.

Stockpiles of everything from gas to coal and Norwegian water for electricity production are dwindling and there are few signs the situation will improve anytime soon as demand continues to roar back from a pandemic-driven lull.

“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 Tuesday.