OPEC+ countries decided to postpone the increase in oil production for two months. However, this did not help to stop the fall in prices. It seems that traders are playing short on the eve of the US presidential election. European gas prices, in turn, are now exciting Egypt’s plans to buy 2 billion cubic meters in the form of LNG, which could go to Africa instead of the EU.
Oil
Over the course of the week, North Sea Brent crude prices fell from $76.9 per barrel to $71.2. In theory, the decision by OPEC+ countries to postpone production increases until December should have halted the fall, but US data offset this.
The White House released data showing that job growth in August was not as strong as expected. This is not a reason for a significant reduction in interest rates by the Federal Reserve System (FRS), writes Reuters. The market expects that lower rates will attract more money to the oil market and demand will increase in the economy.
“The jobs report was a bit weak and implied that the US economy is slowing down,” – said Mizuho’s executive director of energy futures Bob Yawger.
Prices were also affected by concerns about demand in China. In addition, there have been rumours that rival governments in Libya are close to a deal and the resumption of oil exports, which have been halted due to the candidacy of the head of the country’s National Bank.
It seems that the entire market is bearish ahead of the US presidential election in November. For example, Bank of America has lowered its forecast for Brent oil prices for the second half of 2024 from almost $90 to $75.
Gas
European gas prices have sharply turned around and have rebounded this week. For seven days, the price of gas supplies from the TTF centre has dropped from $451 to $416. This corresponds to the level of quotes before the seizure of the Sudzha gas metering station in the Kursk region. But it is still expensive, as this price is twice as high as it was in the five years before the crisis.
Large stocks in European warehouses continue to play a role in lowering prices. Even though Ukrainian transit of Russian gas is stable, risks remain. There are also concerns about repair work in Norway, which is why the Scandinavian country’s exports have already fallen by more than a third to 189 million cubic metres per day.
But the main support for prices this time came from Egypt, which is once again suffering from a catastrophic gas shortage. Declining gas production and heating are forcing the country to buy more and more LNG.
“Egypt is seeking to buy 20 cargoes of liquefied natural gas from October, and for the first time in many years, before winter. This has traders concerned about the balance of the market in Europe, as increased demand in other countries could lead to less fuel reaching their shores.” – he noted in Bloomberg.
Coal did not break away from the trend this week, and its prices followed the example of gas. Supplies of the fuel oil from the Antwerp-Rotterdam-Amsterdam (ARA) hub for the coming month fell during the week from $120.6 per tonne to $115.5.
