OPEC+’s plans to begin increasing production in December and Saudi Arabia’s abandonment of plans to reach $100 oil prices worked against the producers themselves this week. The price of oil has fallen and continues to be quoted between 71 and 75 dollars per barrel. The situation with gas is more nervous. Due to uncertainties with transit through Ukraine and competition with Asia for LNG, gas prices in Europe immediately rise by $30 or more.
Oil
This week, global oil prices fell again, falling to $71.8 per barrel. Since last Friday, North Sea Brent has lost around $3. With daily global consumption of 100 million barrels, this is equivalent to 300 million dollars.
Stock traders, as always, had reasons to go short and vice versa. For one thing, China’s central bank has cut interest rates in an effort to restore economic growth to 5% annually. And in the United States, consumer spending has increased, allowing for a new Fed rate cut. On the other hand…
“Despite aggressive stimulus from China, concerns about oversupply due to OPEC’s production recovery plan have driven prices down,” — said Aegis Hedging analysts, Reuters reports.
Agency sources said OPEC+ countries plan to start increasing production in December; In the last month of the year it will be restored to 180 thousand barrels.
Expectations that there will be more oil on the market have been boosted by the Financial Times report that Saudi Arabia has abandoned its bid to source $100 oil to maintain its market share.
More barrels will appear on the world market before December, from Libya, where rival governments signed an agreement to end the dispute, and exports could recover by 600 thousand barrels per day, up to 1 million.
Platforms in the Gulf of Mexico are also resuming operations after Hurricane Helen.
Gas
Gas prices in Europe have risen sharply this week. For five business days, quotes increased by almost 10%. Monthly advance deliveries at the Dutch TTF hub increased from $409 per thousand cubic meters to $447.
“There is so much uncertainty about this winter again. How strong will demand be, how much gas will actually flow through Ukraine and what will happen if there is a similar increase in demand in Asia? – Rabobank energy strategist told Bloomberg Florence Schmit.
The agency noted that several options for transit through Ukraine are currently on the negotiating table. The Azerbaijani company Socar will participate, reported the Slovak supplier Slovensky Plynarensky Priemysel AS. Look for partners to continue transit.
“While we view the Russia-Azerbaijan gas deal as a welcome initiative, the possibility of continued flows depends on the EU’s willingness to take reputational risks.” — wrote a Rystad Energy analyst Christophe Halser.
The market is also weighing forecasts for an earlier cold snap in Europe, in early October. And also the prospect of competition for LNG with other regions, since in Norway not all fields come out of preventive maintenance on time and in the US export plants are closed due to a hurricane.
“Europe is increasingly dependent on supplies from global manufacturing plants. The closures of these facilities could lead to an even further increase in gas prices in Europe.” —Bloomberg writes.
Rising gas prices were good news for coal suppliers. Stone fuel supplies from the Antwerp-Rotterdam-Amsterdam (ARA) hub for next month increased from $112 per ton to $116.5.
